So maybe your doctor just gave you the “good news” or you just know that you’re on the heavy side. Either way being obese can affect your life insurance rates due to the higher health risk associated with being overweight. Let’s talk about what constitutes obese, morbidly obese and what you can expect from the life insurance companies out there.
The short answer is if you’re obese you can expect a standard plus to a standard rating as long as you have no serious health conditions. Sometimes it’s even possible to get a preferred rate depending on the company’s Build Table and where you fall on that table. If you’re morbidly obese, you can expect to be in the substandard category to a decline. The substandard category ranges from table 1-10 with a 25% increase in premium for each table. The amount of weight and health status will determine what table you will fall into. If you get a decline you have an option get a guaranteed issue or a graded life insurance policy.
After reading that you may have more questions so you have two options:
Option 1 – Give us a call and let us do the shopping for you to find the company that will provide the best rates for you. We work with a lot of cases like this and know which companies are most lenient when it comes to being over the recommended weight.
Option 2 – Keep reading, let’s dive into some detail here.
What the Companies Look At
While being obese usually means a BMI between 30 and 39.9, life insurance companies all have different cut off’s between their ratings. Let’s use Company “A” and Company “B” as examples. If you’re 5’10” and weigh 215 pounds, you’re considered obese. However, Company A will still be able to offer you a preferred rate class while company B will give you a standard rating. That difference can mean huge savings.
The worst part is if you just ran quotes online company B may even offer a better rating for the preferred class. The only problem is their guidelines wouldn’t allow you to qualify for that rate. This leaves many people out there over paying for life insurance because they worked with the wrong agent or company. I always tell clients that the lowest rate on the quote engine isn’t always the lowest rate for you because each company weighs certain risks differently. This is why its super important to work with an independent agency that works with many companies and stays up to date on the ever changing guidelines(that’s us).
A Few Tips That Can Save You Money
There are two things you can do to save yourself money, especially considering just 10 pounds can mean shaving off hundreds off your annual premium. The short term thing you can do is ace the medical exam. Make sure you do it in the morning while coming off a fast. You should also try to eat fairly clean, and little, a couple days prior. This will make sure that you don’t gain any unnecessary pounds while waiting for the exam and maybe even shave off a few. Also stay away from alcohol the night before and your morning coffee not to knock your readings out of place.
The long term thing that you can do is start losing weight. Usually if you’ve been at a new weight for at least one year, the life insurance companies will be willing to reconsider your rate class if it crosses that border on their build chart. For example, let’s say you lose 30 pounds and were able to maintain that weight loss for a year. The life insurance company would be willing to move you from standard plus to a preferred rate which can mean a big savings.
Worst Case Scenario
If you’re morbidly obese the worst case scenario is getting declined for traditional life insurance coverage. At this point your options are left with a guaranteed issue or a graded death benefit policy.
With guaranteed issue there are no health questions or exams, it’s exactly what it sounds like, guaranteed issue. The downfall of this type of policy is the coverage is limited from $10,000 to $25,000 depending on the company. If you die within the first 2 years your beneficiaries will only receive the premiums you paid in so far. After two years you get the death benefit payout.
The graded benefit policy is obtained with no exam and a few medical questions. This policy provides the benefit gradually. For example, if something happens in the first year it will only pay out 30% of the death benefit amount, 50% for the second year, and continues in that fashion. This type of coverage is also usually capped at $25,000.
Your Best Option
Your best bet is to not worry about trying to figure out what to do next and simply let us do the legwork for you. Give us a call 888-492-1967 with all of your questions and we will recommend the best course of action for your specific situation.
