I am 33 years old and weigh about 102kg. I am 5’7" tall. I want to buy a life insurance policy. Will the insurer charge me a higher premium for being overweight?
—Name withheld on request
Your Body Mass Index (BMI) is extremely high. Most insurers will consider your insurance as significantly higher than standard risk and will apply a loading on the standard premium for your age. These loadings can vary between 25% and 50% of the base premium. The increased premium will be constant for the entire term. The loadings vary by insurer and there may also be insurers that reject the insurance because of the high BMI. Before you apply with a particular insurer, consult the insurer’s representative or an advisor about their usual rating practices for BMI.
You should still go ahead and buy a life insurance policy because even with the loadings, a pure term insurance plan will be a cost-effective purchase.
I am 62 years old and have retired from the public sector. I have a family floater policy from my organisation for ₹2.5 lakh. At present, I am healthy. However, I would like to get some advice on how much top-up cover I should take and what are the implications.
A ₹2.5 lakh sum assured is low. Generally, I advise a health insurance sum assured at least equal to your annual income. At higher ages, the health requirement increases, so adjust your sum assured accordingly. At the very minimum, if you live in a metro, consider a sum assured of ₹10 lakh.
A top-up health insurance for ₹10 lakh, with a deductible of ₹2 lakh, would cost about ₹15,000. As you increase the deductible amount, premiums come down substantially. A ₹10 lakh top-up plan with ₹3 lakh deductible costs around ₹11,000. Deductible is the amount of claim that a top-up policy will not pay. It has to be borne by you or by the base policy.
The right time to buy health insurance is when you are healthy. Insurers are reluctant to issue a cover to people with adverse health history, especially at higher age groups.
Abhishek Bondia is principal officer and MD, SecureNow.in. Queries and views at email@example.com