I have a couple clients who are trying to lose some weight before applying for life insurance. The idea is if they can lose enough weight, the insurance carrier will offer them a better rating, thereby lowering their premium. There are some pros and cons of this approach.
Pros - The good news is that if you’re serious and stick to the plan, losing weight before your exam can really save you a lot of money. For example, one of my clients is 55 years old and wants a $400,000 face value, 20 year term policy. He is in great health and doesn’t smoke, but his height and weight are a bit too high to qualify for any carrier’s preferred non tobacco rating.
He’s 6′0, 235 pounds. With most carriers, he will be offered their standard plus NT rating if he were to apply and take the medical exam now. The best price available to him now is MetLife at $161.74 per month. However, if he could just drop 7 pounds, he’ll fit under Banner Life’s preferredNT weight limit for a six footer of 228 lbs, where he’ll pay $129.50 monthly. That’s a savings of $32.24, or 20% less than the MetLife premium! Over 20 years, he’d save almost $8,000 just by dropping a 7 pounds before the weigh in.
And that is very doable. Most people who don’t currently watch what they eat or exercise will drop 5-10 pounds in two weeks, by simply cutting down on the calories and fatty foods, and beginning a 5 day per week work out routine. This should include cardio.
More pros - By doing the above, you’ll obviously be doing yourself a huge favor when it comes to the blood and urine results. Exercise and staying away from fatty foods, even for a couple week period, may help to improve your cholesterol, blood pressure, blood glucose, and more. In order to get a preferred offer, these levels will all have limits as well, so anything that helps here is big plus. Not to mention, think of how much healthier you’ll be and feel.
Cons - Let’s say my client weighed in at exactly 228. He still may not get the preferred rating he was working for. If my client had been to the doctor in the past year and they weighed him, and the insurance carrier requested those medical records, they’ll see he was in the mid 230’s and may average his two weights together to calculate his weight. So if you’ve been to the doctor in the past year and were weighed, you’ll have to fit comfortably under the limit for the rating class you’re trying to get.
Note: If you have to lose more than 10 pounds to hit your target weight, beware that most carriers ask you on the application if you’ve gained or lost more than 10 pounds in the last year. Again, answer yes here and you’ll be likely to get an average weight over the last year than your weight at the medical exam.
Next Con - Many people tell me they want to hold off on taking the application to lose weight, and never lose the weight. In effect, they never apply and never buy life insurance, which is certainly a negative for those who need it. If you need the insurance and don’t trust yourself to lose weight, buy it now and pay the higher premium. In a year, you can reapply (hopefully at a lower weight), and try to qualify for a better price.
Another Con - While some people are putting off the purchase, they’re getting older. Every time we have a birthday, our life insurance premium goes up. Even if your birthday is months away, this can still affect you, since most carriers use your nearest age to determine your insurance age. For example, say my client turned 56 years old while he was trying to lose the weight. Now his premium, even if he got the preferred rating, would be $141.75, not as much savings as he had hoped for.
My recommendation if you’re looking to lose weight for a life insurance exam is to go ahead and apply right away, and schedule the medical exam for 2-3 weeks out. This way you have a target day in your head and you’ll be more likely to get going on your diet and work out program. If you don’t hit your target weight, you can always reschedule the exam, but hopefully just the scheduling of the appointment will provide the motivation you need to start shedding those pounds.
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