Dubai: Those who are looking to invest in an insurance plan are likely to spend more on premiums if they are amply endowed around the waist, financial planners told Gulf News.
Insurers take into account a number of factors before approving an insurance application, and the person’s weight, along with the medical history, can increase the price by as much as 25 to 40 per cent.
This is particularly true when buying a life insurance plan, unless there is a blanket cover provided for by the employer.
“When individuals approach insurance companies for life insurance, the [insurer] does charge a higher premium to the individual for being overweight,” said Preeti Bhambri, founder of personal finance website MoneyCamel.com.
“When there is a blanket cover provided for life insurance, such as an employer taking cover for employees in a company, then individual weight metrics do not matter,” said Preeti Bhambri, founder of personal finance website MoneyCamel.com.
Costly affair
Investing in an insurance plan can be a costly affair for many UAE residents, especially since a huge proportion of the population is believed to be overweight or obese.
A study conducted by Zurich International Life among more than 20,000 UAE residents who have applied for life insurance or critical illness cover, showed that 47.5 per cent are overweight, while another 13 per cent are obese.
Excess weight has been associated with health problems, including cardiovascular disease, diabetes and cancer, which means an insurer is likely to spend more on medical care for people that are overweight or obese.
“Generally speaking, weight, or more specifically obesity, is a contributing factor to many adverse health conditions such as diabetes, coronary heart disease and many more. This means the individual is more likely to claim on the insurance and therefore the insurance company will look at a higher premium,” said Andrew Prince, financial planner at DeVere Acuma.
Bhambri said the extra premium can be approximately 10 to 25 per cent, or even 40 per cent, though no insurance company will disclose any numbers.
“There can be up to 40 per cent loading on standard premiums, depending on each individual’s case. Actually, 40 per cent is the maximum loading [so the average] extra premium can be 10 per cent to 25 per cent.”
Prince said the same pricing principle applies to those who smoke or have the potential of developing other forms of disease.
“Insurance companies will look at a person’s overall health and medical history whilst assessing the potentially increased risk of insuring that person. The same applies to being a smoker and the increased risk of lung diseases such as cancer. The higher the risk, the greater the premium or less likely the application will be accepted based on standard terms.”
Prince, however, said that it is unlikely that an insurance company will reject an insurance application based purely on weight.
The insurance company is more inclined to either defer the start of cover or “increase the premium to reflect the higher likelihood of the client claiming on the insurance policy, particularly so with critical illness benefits.”
