Q I have been reading articles regarding mortgage life insurance cover. Unfortunately I have a higher-than-wanted body mass index (BMI) count, and from what I’ve read I believe I would find it hard to get insurance.
If I wanted to sell my existing property and buy a new place, but couldn’t get mortgage life insurance due to my BMI, is it compulsory to have cover to be accepted for a mortgage? Would my lender still lend to me if I earn enough to pay the mortgage? AM
A Mortgage life insurance, also known as mortgage protection insurance, pays out a lump sum which is sufficiently large to pay off the outstanding debt if you die before the end of the mortgage term. Unlike buildings insurance, which lenders do insist you take out, it is not normally a definite requirement that you take out this sort of life insurance. So provided you pass your lender’s affordability test, your lender will still lend you the money whether you have a life policy or not.
If you are buying property on your own and have no dependants, you don’t need mortgage protection insurance, because if you died the property could be sold to pay off any outstanding mortgage. If, however, you do have a family whose home the property is and who could not afford to pay the mortgage without you, then you should consider taking out a policy.
You are right in thinking that your high BMI will affect any life insurance application, but it doesn’t necessarily make obtaining cover impossible.
According to the Special Risks Bureau, which specialises in finding cover for people regarded as high risk, including those with a high BMI, if your BMI is within an insurer’s standard minimum and maximum levels (which vary from insurer to insurer), your weight is not likely to affect your application. However, if your BMI is under or over these levels you are likely to see an increase in the cost of the policy.
Some insurers will increase premiums, typically by 25%, for someone with a BMI of 30 or above, which is deemed clinically obese. But there are others who will charge the standard premium for those with a BMI of 36 or more. Premiums tend to be loaded incrementally for BMIs between 36 and 50. For people with a BMI over 50 there are specialist insurers, but the price will be high.
