Good health can mean extra wealth

Tuesday 09 June 2015, 04:30 PM

Ricky Butler
Head of Best Practice , LifeSearch

Being in good health is not just good for your lifestyle; it can benefit your pocket too. Maintaining a healthy lifestyle can lower your life insurance premiums and ensure you don't pay any more than you have to.  

Taking sensible steps to reduce any potential health risks, such as controlling your blood pressure or losing a few pounds, can often result in life insurance premiums dropping by as much as 50%. A lot of people believe the premium quoted by their bank or through a comparison site is the final price they would pay, but in fact the final premium will only be known once the application has been fully underwritten for any potential risks. This is why applying online can be a risky strategy and why we would always recommend that you take advice.

Lower premiums are clearly a good thing for the healthy among us, but what about those who suffer from a chronic or hereditary condition? Many people actually end up paying far more than they need to because they don't shop around for the best deal, or in some cases they struggle to get cover at all. Getting proper advice makes a lot of sense, as insurance companies have differing stances when it comes to underwriting a policy's risk.  

Whatever the condition, it's important that you disclose everything when you apply for cover as it could invalidate a claim should you withhold any information.    

Below are some of the most common medical risks that we suffer from and what steps you could take to keep your life insurance costs down. 

Smoking 

You don't need us to tell you that being a smoker is expensive, but it's not just the cost of the habit itself, it will also double your life insurance premium. It may seem harsh, but the fact remains that in the eyes of the insurer, compared to a non-smoker, you present double the risk of dying during the term of the policy. It's not all bad news, however, as the insurer will class you as a non-smoker if you have not used any tobacco products or nicotine replacements for 12 months. So, if you've given up but not informed your insurance company then it's worth doing so straight away as the insurer may be able to amend your policy to non-smoker rates, lowering your premium immediately.  

It could be worth shopping around as other insurance companies may be offering more competitive rates, but remember that the new insurance company will take all of your health factors into consideration, so if your health has deteriorated it may be worth staying where you are, even if it wasn't the best deal available when you took out the cover. If you're comfortable with the premium you're currently paying, you may want to consider increasing your cover as opposed to saving money, or perhaps enhance your protection by including some critical illness cover or long-term income protection.

Blood pressure 

If you have high blood pressure it's likely you will be considered a risk by the insurance company, especially if you haven't taken any positive steps to address it. If you're taking medication, or have made a positive change to your lifestyle, such as a new diet or exercise regime, this could be looked on favourably by the insurers. If you suffer from high blood pressure, or have done so in the past, you'd be wise to arm yourself with an up-to-date blood pressure reading. The ideal blood pressure reading for a healthy individual is considered to be around 120 over 80 (120/80). Maintaining a blood pressure around this level could help to ensure that you have a much lower risk of heart disease, stroke and kidney disease. If you suffer from high blood pressure, it could mean an increase of 25% - 100% on your life insurance premiums, especially if there are any combination risk factors such as smoking or raised cholesterol. As always, it pays to shop around, so we would recommend that you speak to an adviser.

BMI 

Body Mass index, put simply, is a measure of body fat based on your height and weight and it applies to both men and women. From an insurer's perspective they will consider you overweight if your BMI is over 30 and underweight if your BMI falls under 20. The BMI measurement isn't perfect and can sometimes penalise healthy people with an unusual height to weight ratio (think weightlifters and rugby players), so many insurers have also started to take waist size and dress size into consideration when assessing the risk you represent to them. Our advice is make sure you have weighed yourself recently, and if you fall outside the healthy BMI range, make sure you seek advice. It's likely that any premium quoted online or elsewhere will increase once underwritten. A reputable, experienced broker is likely to be able to put you in touch with the best insurance company based on your individual circumstances, saving you the hassle of shopping around as well as ensuring that you avoid paying any unnecessary additional charges on your premiums (known as ratings). In the most extreme cases, a broker could even help you get cover where you may have been refused in the past.

Diabetes 

Just because you have diabetes doesn't mean that you can't get life insurance. Often it will simply mean that you end up paying more than someone without the condition. Having diabetes means that you are at a greater risk of developing other serious health conditions in the future, such as blindness and heart disease. Insurance companies will be interested primarily in how well you control your diabetes, when it was diagnosed, and whether it has had any impact on other areas of your health or lifestyle. The biggest indicator of how much extra you might pay will be your HBA1c test reading, which is typically measured every 6 to 12 months. Type 2 diabetes, if it is well-controlled, will attract an increased premium of between 50-100% and Type 1 will be 100% upward, so it's worth factoring this in when working out your monthly budget.  

And for the healthy among you!..

Many of you may be reading this thinking "None of this applies to me" and "Why can't they reward me with lower premiums if I'm healthy?" Well, the good news is that you can!  

Some insurers are now recognising that people want more from their policy than just peace of mind if they should die. Many customers want cover that rewards them for being healthy and active. PruProtect offer life cover with an annual cashback and also a rewards programme known as Vitality. This means that trips to the gym, a medical examination, or filling in a non-smoking declaration can help to keep your premiums low.




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