How your health may impact your life insurance

Life insurance isn’t one-size-fits-all. It considers your own individual health and lifestyle habits. So let’s take a look at what may impact those premiums. 

Your health insurance and life insurance - what is the difference?

Health insurance and life insurance do have some things in common, but they are different options. 

Even though healthcare is covered in New Zealand (say, if you break an arm and need to go to the hospital), there are some things that aren’t publicly funded. For example, if you needed a non-urgent surgery, you would need to go on a public wait list. However, if you went to a private hospital, you can either pay out of pocket or with health insurance and not have to wait as long. Although, keep in mind that not everything is covered by health insurance (pre-existing conditions are not usually covered, for example). 

Life insurance, on the other hand, is designed to offer a financial payout in the case of your death. That money would go to a person of your choosing and could be used for anything from funeral costs, to assisting with the mortgage, to paying off outstanding bills. 

What could impact your life insurance premium?

There are a number of ways your health can influence your life insurance premium. Here are a few common factors that you may come across when looking for life insurance. 

Impact of pre-existing conditions

It’s a common myth about life insurance that you wouldn’t be eligible at all if you have a pre-existing condition. However, that’s not always the case. 

You may still be eligible for cover but may be required to pay a higher premium. This allows you to enjoy the perks of having life insurance, even if it does cost a bit more. 

Another option may be that you are offered an insurance policy that excludes particular health conditions but this would be explained in more detail by your insurance provider.

Does smoking affect life insurance?

Are you a smoker? It probably comes as no surprise that being a smoker will likely increase your life insurance premiums. The good news is, if you are a non-smoker, you are usually guaranteed a lower premium and it might surprise you that being a non-smoker doesn’t necessarily mean you have never smoked – in some cases you may only need to have not had a cigarette in the last 12 months or so to qualify as a non-smoker.

The even better news is that as a country, we’re consistently seeing fewer people smoke. Recent figures show our lowest smoking rate ever, with just 8% of adults smoking daily (which was down from 9.4% from just a year earlier). 

BMI and life insurance

Your BMI, or Body Mass Index, is an estimate of whether your body weight is in a healthy range for your height. It’s not a perfect tool but can be a good indication of general health. 

The BMI tool uses your height and your weight to make the calculation. If your result is: 

  • below 18.5 – you're in the underweight range
  • between 18.5 and 24.9 – you're in the healthy weight range
  • between 25 and 29.9 – you're in the overweight range
  • 30 or over – you're in the obese range

Anyone in the overweight or obese range may see higher insurance premiums than if you were in a healthy weight range. 

Life insurance and diabetics

An estimated 300,000 Kiwis have been diagnosed with diabetes and if you are a part of that figure, you may notice an increased cost in your life insurance premiums. Diabetes can result in an increased risk of developing other serious health issues or conditions, which is one of the reasons your life insurance provider may apply a ’loading’ or a surcharge on top of the standard premium to cover this risk. 

It’s important to note as well that the specifics of your condition, what type of diabetes you have, and your individual circumstances may also play a role in determining whether you can take out a life insurance policy and at what cost. 

High cholesterol

High cholesterol is relatively common in New Zealand, and it’s another factor that can play a role in bringing up your premiums. 

Fortunately, this is one health area you can control. It does require a healthy diet and regular exercise to do so, but if you find that your life insurance quote is a little on the high side, at least you know you can do something to bring both it – and your cholesterol – onto the lower side. 

Knowledge is power

It is also important to know that your life insurance provider may allow for particular health and lifestyle factors, such as your smoking status or your BMI, to be re-evaluated over time if you have quit smoking for over 12 months or are sitting within a healthy weight range after weight loss, for example. This may possibly result in a cheaper premium but it’s best to discuss this in more detail with your provider to learn more.

Speaking of, if you are considering life insurance, you can get a life insurance quote by answering just a few questions. This will give you a basic idea of what you might expect to pay for your premiums, and what that could get you in terms of peace of mind for your loved ones. 

Disclaimer: This article is an opinion only, provided for general information purposes and shouldn’t be considered or relied upon as professional or personal advice. If you have legal, tax, or financial questions, you should contact an appropriate professional.