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The More You Weigh, the More You Pay

Being overweight boosts your chances of getting sick -- and your insurance premium.

We've all heard the reports about the epidemic of obesity in this country, which has severe implications for public health. But we rarely hear about what obesity means for our wallets.

The impact is not lost on the life insurance industry, however. Obesity causes at least 300,000 excess deaths in the U.S. and is the second leading cause of unnecessary death, according to the American Obesity Association.

If you've ever applied for a life insurance policy, you know that the insurance company asks you all kinds of questions about your health. It's using this information to determine the risk it's assuming by writing your policy. The greater the health risk you are, the greater the chance that you'll die younger, and the insurer will have to pay out the death benefit on your policy. Consequently, the more you weigh, the more they charge.

Just how much can being overweight cost you? To find out, I went to

insure.com, a popular life insurance Web site. I entered the same information four times: healthy 6-foot tall, 40-year-old male with good cholesterol, good blood pressure who doesn't smoke and has no family history of heart disease, diabetes, etc. The only thing I varied was the weight.

All else being equal, weight had a dramatic effect on the price of a 20-year, level-premium term life policy. In fact, someone who weighs 270 pounds will pay more than three times what someone weighing 180 pounds pays. Someone weighing 240 pounds pays more than twice as much.

Premiums also varied significantly among insurers for a person with the same weight, ranging from $395 to $520 per year for someone weighing 180 pounds to $1,030 to $1,685 per year for someone weighing 270 pounds.

Insurance companies use what is known as a height-to-weight ratio to determine what they'll charge you, and different companies use different ones. So it can pay to shop around.

The good news is that if you purchase a level-premium policy, like the 20-year term I used in my example, your rate is locked in. So if you gain weight as you age, the insurance company can't charge you more.

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The flip side is that if you lose weight -- and keep it off -- you can shop around for a new policy at a lower rate and cancel your current policy.

Nearly as important as your health is the health of the insurance company you rely on. You want to buy from a company that will be around in 20 or 30 years to pay your claim. There are about 150 companies that sell life insurance to individuals in the U.S. You can find out the financial strength of your company or any that you may be considering

here.

There are many regional companies that are financially sound, but the strongest companies that offer life insurance nationwide are listed here.

Melissa Gannon is director of insurance and bank ratings for TheStreet.com Ratings, formerly Weiss Ratings, where she directs the operations of the company's insurance and bank ratings division.

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