At a glance:
- See how everyday choices like smoking, diet, and exercise impact what you pay for critical illness insurance.
- Discover simple lifestyle changes that may lower your insurance premiums while boosting your health.
- Learn through relatable stories of how others’ lifestyle changes affected their critical illness premiums.
Life can always throw in an element of surprise, and then a health crisis comes from left field. Trauma insurance, better known as critical illness insurance, pays out in a lump sum should one be diagnosed with such conditions as cancer, heart disease, or stroke.
But did you know that lifestyle choices can significantly affect your insurance premiums? Here’s a look at how your daily habits might impact what you pay, along with stories to make the concepts clear and relatable.
What is Critical Illness Insurance?
Critical illness insurance will provide you with a lump-sum payment upon diagnosis of a covered serious illness. You can use it for medical bills, daily expenses, or lifestyle adjustments to take your time and focus on recovery. Policies at Aspect Insurance, for instance, cover conditions such as heart attacks, strokes, and major surgeries in an effort to keep you safeguarded against the curveballs thrown by life.
Critical Illness Insurance vs Life Insurance
How Lifestyle Choices Affect Premiums
Your lifestyle plays a major role in your health, and insurance providers factor in those choices to calculate your premium. Here’s a breakdown of some key lifestyle factors and how they can influence what you pay.
Smoking Status
Smoking is one of the most determining lifestyle factors for insurance. The risk of getting cancer, heart disease, and respiratory problems means smokers usually must pay more in premiums.
Example: Meet Mark. He’s a 40-year-old smoker who recently looked into a critical illness policy. His premiums turned out to be almost double those of his non-smoking friends. Why? Because smoking elevates the risk of essential illnesses, which thereby elevates his risk to insurers. Mark realises that quitting smoking could not only improve his health, but potentially reduce his premiums if he can show he’s been smoke-free for a year.
Alcohol Consumption
While moderate drinking may be acceptable, excessive alcohol intake is associated with a variety of health issues, ranging from liver disease to heart complications. Because of this, insurers may charge higher premiums for individuals with high alcohol consumption.
Example: Sarah loves a social life and often drinks a lot more than the recommended weekly allowance. When she came to buy critical illness cover, one of the questions from her underwriting insurer was the amount she drank. Her premium was adjusted to reflect that higher risk, and her advisor advised her to reduce her intake for perhaps a better rate sometime in the future.
Body Mass Index (BMI)
While BMI is a way of estimating body fat based on height and weight, if it falls outside the range of normal values, it presents risks to health. As a matter of fact, people with higher BMIs could be charged much higher because of the greater risk of possible heart diseases, diabetes, and other ailments.
Example: James has a BMI of 32, indicating he is overweight. The day he applied for critical illness cover, he found out that he needed to pay higher premiums based on his BMI. The advisor told him that just by losing a small amount of weight, his overall health would improve and perhaps so will his future premiums.
Physical Activity
A sedentary lifestyle carries a lot of health risks, such as cardiovascular diseases and obesity. Insurers may consider physical activity levels when setting premiums, as regular exercise is often associated with good health.
Example: Rachel works in an office and rarely finds time to exercise. Upon application for critical illness insurance, her sedentary lifestyle factored into the premiums. Her underwriting advisor recommended incorporating light exercise into her routine, which would have positive effects on her health and might lower her rates with time.
Diet and Nutrition
A balanced diet supports overall health, and some insurers consider dietary habits, especially for people with pre-existing conditions. Poor diet choices may lead to obesity, high blood pressure, and high cholesterol, increasing premiums.
Example: Tom’s diet consists of fast food and sugary drinks, and his weight and blood pressure reflect it. When he applied for insurance, his diet was a factor that pushed his premium higher. By making healthier food choices, he could improve his health and potentially see a premium reduction.
High-Risk Occupations and Hobbies
High-risk jobs, like construction or firefighting, or hazardous sports, such as skydiving or rock climbing, will raise your vulnerability to injury or illness. Generally, insurers use these factors when determining premiums.
Example: Alex enjoys rock climbing and works in a job that is quite physically demanding. His insurer rated his job and hobby as a higher risk, which then increased his premium. Having spoken to his advisor about various options, Alex realised his active lifestyle meant he could retain his cover, but he would need to pay a bit more.
Managing Premiums with Healthier Choices
If you’re considering critical illness insurance, you don’t need to overhaul your life overnight, but small changes can make a big difference to both your health and your insurance costs. Here are some ways you might reduce premiums over time:
- Quitting Smoking: Many insurers require a smoke-free period (often 12 months) before offering non-smoker rates. Quitting can reduce your risk of critical illnesses and might significantly lower your premiums.
- Reducing Alcohol Consumption: Cutting back on alcohol to recommended levels can improve your health and may positively impact your insurance costs.
- Achieving a Healthy BMI: Aiming for a healthy weight can reduce the risk of certain conditions. Insurers might reward lower BMI levels with reduced premiums.
- Staying Active: Incorporating regular exercise can enhance physical and mental well-being, possibly lowering premium rates in the long run.
- Improving Your Diet: A balanced diet can lead to better health outcomes. By making simple dietary changes, you can positively impact your health profile and insurance premiums.
How Aspect Insurance Can Help
At Aspect Insurance, our advisors will work closely with you to understand your unique situation and help you find a policy that fits your needs and budget. Whether you are a smoker looking to quit, someone considering more regular exercise, or just curious about how lifestyle changes can affect your premiums, we’re here to support you.
Example: Jenny recently turned 35 and wanted to get critical illness coverage for peace of mind. Upon early assessment, she found a few health-focused changes can provide access to lower premiums in the future. Her advisor with Aspect Insurance walked her through some lifestyle tips and set into place how these changes would further positively impact her policy, on a path to better health and financial security.
Read before filing your Critical Illness Insurance Claim.
Key Terms to Know
Premium: The cost of your insurance coverage, which may be influenced by your lifestyle.
Lump-Sum Payment: This is a one-time payment to the policyholder when diagnosed with an insured critical illness, meant to be used for medical costs, living expenses, or any other need.
BMI (Body Mass Index): A measure of body fat based on height and weight that insurers may use in determining premiums.
Non-Smoker Rate: Rates available to applicants who have not smoked within a certain number of years.
Lifestyle choices play a significant role in determining critical illness insurance premiums. By making healthier decisions, you’re not only improving your own well-being but potentially lowering your insurance costs as well. Aspect Insurance guides you in finding a policy that fits your needs and lifestyle, offering support along the way to help you make informed choices.
Ready to explore your options? Visit Aspect Insurance to learn more about critical illness coverage, or contact an advisor for a personalised consultation. Protect your future today—because peace of mind is worth every step.
Mike Wallis
Mike has over 25 years experience, having spent his first seven years working as a Broker at Jardine Lloyd Thomson in Melbourne and in 2002 was transferred to JLT’s Accident and Health Department in London. For four years (2002 – 2005) Mike was a specialist A&H Lloyd’s Broker and during this time developed excellent relationships with the Lloyd’s A&H underwriting fraternity. In 2006 he returned to Australia in a senior broking position with overall responsibility for Placement Strategy, including the implementation of underwriting facilities and the various authorities granted by Lloyd’s. Mike was the underwriter at two specialist Underwriting Agencies prior to founding Aspect Underwriting in 2016.
