Obese face 50% fat tax for life insurance
INSURANCE firms are to levy a "fat tax" on the obese. Costs for the seriously overweight could be 50% higher on new premiums, and the threshold at which the higher rate starts will be lowered.
Britain's biggest life insurer, Legal & General, confirmed that 13% of new applicants face paying the higher premiums, which apply to anyone with a body mass index of 30 or higher, the point at which people are declared medically obese.
The increased charge can be up to 400% if you fall into other high-risk categories, such as being a smoker or having previous medical conditions.
For a 55-year-old man who is a healthy non-smoker with no weight problems, life insurance should cost about 1,000 a year for 150,000 of cover. If he were obese, the annual premium on a 25-year policy could cost an extra 500.
Britain is in the grip of an epidemic of obesity, which can lead to cancer, heart problems, liver disease and diabetes. Nearly one in four adults and 16% of children have weight problems that threaten their health. More than a million prescriptions for obesity drugs were written by doctors last year, compared with just 127,000 in 1999.
Russ Whitworth, Legal & General's director of underwriting and claims, said: "Most people understand that poor diet and lack of exercise can lead to health problems but they might not realise that being significantly overweight would also make their life insurance more expensive.
"Although it is not an exact science, we find that BMI is the best indicator of the risk of being overweight, so it pays to stay in shape."
Other insurers also confirmed that they charge fat people at least 50% extra. At Norwich Union, the second largest life insurer, premiums start rising once the BMI hits 35. Friends Provident, the third largest insurer, begins "loading" premiums when the BMI is over 33.
A spokesman for the Association of British Insurers said: "If you are obese, you are at greater risk of contracting certain diseases. It is just the same as increasing the premium for a smoker or somebody with previous medical conditions."
All life insurance applicants are asked for endless details, including their exact height and weight. Lying is a false economy, because the insurer may not pay out for men or women who are classified as obese but who do not declare the fact.
In one recent case, a 37-year-old man told his insurer he was 6ft and weighed 16 stone. Just five months later, he died from a blood clot – but the claim was rejected after discovering he was actually 5ft 9in and 21 stone.
If it had know the truth, the insurer said it would have increased his premium by 275%.
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