another reason to lose for UK-ers

http://observer.guardian.co.uk/cash/...227446,00.html

Obesity's ills spell fatter bills
As Britons lose the battle of the bulge, insurance firms are set to charge
overweight people even higher life premiums. Jamie Felix weighs up a trend that
can already add over £3,000 to the cost of insuring a mortgage

Jamie Felix
Sunday May 30, 2004

The Observer

Being fat is not just bad for your health - it can hit you in your wallet
through hefty insurance premiums.
As the government considers its response to last week's dramatic report on
obesity from the Commons select committee on health, insurers are bracing
themselves for increased claims from weight-related ilnesses.

The prices of life insurance, critical illness policies and disability cover are
dramatically higher for the overweight than those of healthy weights and as
obesity increases more people will face higher premiums.

For example, a healthy 35-year-old man, who is 175cm (5ft 9in) tall and weighs
76kg (nearly 12 stones), will pay the standard rate of about £8.60 a month at
Norwich Union.

If his weight is 102 kg, the cost goes up by 26 per cent to £10.80 a month. If
he weighs in at 125kg he pays a whopping £19- nearly £125 extra per year and
more than twice the standard rate.

The higher premiums could add thousands of pounds to the cost of life insurance
to cover a mortgage.

The 125kg customer would pay £3,125 more over 25 years than someone qualifying
for the standard rate. Norwich Union says the severely overweight may be refused
cover altogether.

Ultimately, rising claims on life insurance from weight-related illness could
force up premiums for all.

Obesity is having an even greater impact on critical illness insurance, since
overweight people are far more likely to develop a serious sickness than to die
from obesity-related problems such as diabetes, stroke or a heart attack.

An obese applicant, for example, might pay 50 per cent more for life cover but
need to shell out 75 per cent more for critical illness insurance, says a
spokeswoman at private health insurer Bupa.

Norwich Union's chief underwriter, Tony Jupp, says: 'You can pretty much count
on paying at least double for critical illness cover [if you're obese].'

Russell Whitworth of Legal & General agrees. 'We try to give as many of our
customers the normal rate as possible, but critical illness cover is a more
sensitive area,' he says.

Just as the government has recognised the economic and health costs of the
nation's bulging waistlines, so insurers say they need to consider the problems
in providing both death and disability benefits to an increasingly overweight
population. More than two-thirds of Britons - 67 per cent of men and 52 per cent
of women - are overweight or obese, and obesity will soon overtake smoking as
the country's leading cause of preventable death.

As a result, insurers fear the spiralling costs of obesity-related claims,
including many for diabetes, stroke, heart disease and several types of cancer.
Norwich Union warns that 'the extra costs of insurance will begin to affect more
and more of us'.

The National Audit Office estimates that obesity accounted for 18 million days'
absence from work due to sickness and 30,000 premature deaths in 1998, the
latest year for which figures are available.

'Obesity, on average, knocks about eight years off the typical lifespan, and
that has huge ramifications for us as insurers,' explains Norwich Union's Jupp.

Life insurers typically use the body mass index (BMI) - which is worked out by
dividing a person's weight in kilos by the square of their height in metres - to
assess an applicant's build.

Most firms consider an applicant with a BMI of between 25 and 30 overweight,
while anyone rating more than 30 is considered obese.

Generally those with a BMI of 30 and over can expect to pay at least 50 per cent
above the standard rates for term life insurance, says a spokesman for
independent adviser LifeSearch. Those with a BMI of between 35 and 40 can expect
multiples of that, or be denied cover altogether.

Obese people who smoke or show additional risk factors will have their premiums
increased even more.

Bupa says it does look further, however. 'We try to look at the whole picture in
terms of an applicant's health; not just BMI,' says Val Davies, the chief
underwriter for its life insurance arm.

Applicants who are marginally overweight shouldn't have a problem getting a
policy, Davies says, but those with abnormally high BMI figures must give
additional medical details or visit a Bupa nurse, who will check their
cholesterol and blood pressure and ask questions about their lifestyle.

Davies insists the extra information is aimed at helping understand an
applicant's overall fitness, rather than seeking factors that could drive up the
cost of coverage. 'Not everyone with a high BMI is unhealthy. Rugby players, for
example, often have high BMIs but are quite fit,' she says.

Ronald Klein, global head of pricing at insurer Swiss Re, says: 'As more
consumers' BMI goes up, so too will their premiums.' His firm published a report
last month on how the rising tide of obesity in Britain is changing the way
insurers calculate premiums.

As more of us box ourselves into cubicles at work and park ourselves in front of
the TV on weekends, our sedentary lifestyles mean we're piling on the pounds
later in life, even though we are still paying the initial rates that were
guaranteed at the time we took out our insurance policies.

Insurers could start focusing more on such factors when assessing healthy
applicants in the future. The cost of a policy might, for example, take into
account how much exercise someone does or see how many times they visit the gym
each week.

Requiring a mid-term 'health assessment' of holders of long-term policies is
also a possibility, according to the Swiss Re report.

While charging portly customers more will help meet the increasing costs of
obesity-related claims, insurers realise the long-term solution lies in tackling
the root causes of Britain's expanding waistline to begin with: by teaching
Britons how to live more healthily, eat better and take more exercise.

Jupp says Norwich Union is especially worried about the young. Obesity among
those aged between six and 15 has trebled since 1990, and one child in three is
now overweight or obese.

As a result, more kids have diseases normally found in adults, including
diabetes and high blood pressure.

Some health experts fear the next generation may not even live as long as their
parents. Obese children gener ally carry their extra weight and unhealthy habits
into adulthood, a daunting prospect for themselves and their families, as well
as for insurers which feel they cannot cover them.

'In the crystal ball, I see a far higher percentage of young people who are
going to apply for insurance when they want to take out their first mortgage,
and will be hit with higher and higher premiums,' says Jupp. 'Unfortunately,
it's very difficult to explain to a young person how their unhealthy habits will
affect them 20 or so years.'

Norwich Union launched a new 'Adopt A School' programme last week to encourage
children to become more active and promote the benefits of regular exercise. It
pairs up health clubs and leisure centres with primary schools to give pupils
access to fitness facilities and qualified staff.

One small consolation is that obesity can make you better off in old age, by
giving you a better annuity rate - but only because you're likely to die younger.