What impact do factors like your weight, age and smoking status have on your ability to buy life insurance?
‘Sneaky smokers’ can breathe a sigh of relief – just because you’ve got an unhealthy habit or two, it doesn’t necessarily mean you can’t get insurance.
This list reveals the answers to those awkward questions you might have – but are afraid to ask – about your ability to buy life insurance.
Am I too overweight to buy life insurance?
Life insurance applications generally ask for your height and weight, and insurers typically use a measure known as Body Mass Index (BMI) – which is calculated by dividing your weight in kilograms by your height in metres squared – to assess whether you are overweight.
A BMI of less than 18.5 is considered underweight, with 18.5-24.9 classified as a healthy weight range. Anything over 25 is considered overweight.1
People who are overweight have higher rates of death and illness than people of healthy weight and are more susceptible to conditions such as cardiovascular disease, high blood pressure and type 2 diabetes.2
But having a BMI of over 25 will usually not prevent you from buying life insurance, as insurers also take other weight-related factors into account such as your waist circumference, medical history and pre-existing medical conditions.
Depending how high your BMI is, you might be required to have a medical assessment, and based on your perceived risk, may be offered cover at a higher premium or with exclusions applied. Only in extreme cases is it likely that cover would be denied.
Am I too old to buy life insurance?
All life insurers have a maximum entry age, which in Australia typically ranges from 59 to 79 years old.3 The oldest age at which you can buy life insurance from AMP is 70.
However, older applicants may not be eligible for all the benefits included in the cover, or for the maximum levels of cover.
All policies also have an expiry age, after which you’re no longer covered. In Australia, this typically ranges from 85 to 100 years old.4 The expiry age for AMP’s stand-alone life insurance is 99 and if your life insurance is held through your super the expiry age will be lower.
But given the purpose of life insurance is to ensure the financial security of your dependents and provide a payment which will cover your debts, it’s possible that some older people may no longer need life insurance.
Can I get life insurance with a history of mental illness?
With almost a fifth of all Australians reporting having suffered from a mental or behavioural condition, mental illness is a relatively common occurrence and will not necessarily prevent you from buying life insurance.5
When assessing your application, insurance companies will consider a range of factors including the seriousness of your mental health condition, its impact on your employment and lifestyle, the success of any treatment, management strategies and any ongoing symptoms.6
In severe cases, you may be declined insurance, although different companies have different underwriting criteria, so it pays to shop around.
Can I apply as a non-smoker if I sneak a cigarette now and then?
The short answer to this question is no. Life insurers consider anyone who smokes cigarettes – regardless of the quantity – a smoker. This definition also extends to people who smoke cigars, chew tobacco or use nicotine patches.7
Smokers can be charged much higher premiums than non-smokers, and your premiums can be impacted by how much you smoke and how long you’ve been smoking, as these factors increase your risk of serious illness or death.8
In order to be classified a non-smoker, you need to have not used any nicotine product in the past year. The good news is that if you’re able to do this, you could qualify for a reduction in your premiums.9
It’s important not to lie about your smoking status as, in the event of a claim, your insurer could deny your claim if they can prove you’ve lied.
Can I leave my insurance money to someone other than my spouse?
As long as they’re aged over 18, you can generally nominate whoever you like as your life insurance beneficiary.10
You can also nominate more than one beneficiary if you choose and specify what percentage of the payment you want each person to receive.
Depending on whether your insurance is held inside or outside of super may affect who you can chose as your beneficiary.
The life insurance available through super is typically bought on a group basis meaning it usually guarantees you cover without taking into account your specific circumstances.11
So if one or more of the situations above applies to you, opting for life insurance through your super may be the easiest and most cost-effective way to get cover.
1 Australian Institute of Health and Welfare, Overweight and obesity, paragraph 4.
2 Australian Institute of Health and Welfare, Overweight and obesity paragraph 1.
3, 4 Finder, Life insurance for over 70’s, table.
5 Australian Bureau of Statistics, National Health Survey: First Results, 2014-15, mental and behavioural conditions, paragraph 3.
6 Lifewise, Mental illness and life insurance, what you need to know – a brief guide, paragraph 6.
7, Finder, Regular smokers and life insurance, paragraph 1.
8, Finder, Regular smokers and life insurance, paragraph 6.
9, Finder, Regular smokers and life insurance, paragraph 9.
10 Finder, Updating life insurance beneficiaries, paragraph 6.
11 Moneysmart, Insurance through super, paragraph 4.
Your super checklist for EOFY14 June 2023 | Finance 101 With the end of financial year fast approaching, now is a good time to consider how you can use superannuation to maximise your tax benefits. Read more
Key points from the 2023-24 Federal Budget10 May 2023 | Blog Find out how the 2023-24 Federal Budget proposals could affect you. Read more
How to cool down if you’re getting in a hot state with your finances02 September 2022 | Blog The 2022 AMP Financial Wellness report highlights increasing stress levels Read more
What you need to know
Any advice and information is provided by AWM Services Pty Ltd ABN 15 139 353 496, AFSL No. 366121 (AWM Services) and is general in nature. It hasn’t taken your financial or personal circumstances into account.
It’s important to consider your particular circumstances and read the relevant product disclosure statement, Target Market Determination or terms and conditions, available from AMP at amp.com.au, or by calling 131 267, before deciding what’s right for you.
You can read our Financial Services Guide online for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relation to products and services provided to you. You can also ask us for a hardcopy.
All information on this website is subject to change without notice. AWM Services is part of the AMP group.