Starter Guide to Financial Planning
Severely Overweight And Rejected Everywhere.
What Is My Next Step?
For those of you, who are accepted by insurance companies when you are buying a life insurance, be thankful that you are the fortunate ones. There are people who are overweight and not able to get insurance coverage anywhere.
The reason why insurance companies do not want to accept an individual who is severely overweight is due to the fact that the person himself is risky. Risky in a sense that he might fall sick easily due to his size or chances of him getting a heart attack might be higher compared to an average Joe.
It is disappointing and tiring to be rejected by insurers and all hopes seem lost. One door closes but it is just a sign that you have to find another way in.
Thus, this article will share of what you can do if you or anyone you know is in this situation.
Go for Moratorium Underwriting
This step does not apply to everyone. You can skip this step if you already have an insurance application submitted and rejected.
What is Moratorium Underwriting?
It is a type of underwriting that will not require you to fill up the medical questionnaire. The insurer will accept you “blindfolded” and assume that you are a normal person. With this underwriting method, any medical condition will be covered up and somehow not acknowledge by the insurer. Accepted straightaway and no hassle.
But what is the catch?
For Moratorium Underwriting, the insurer will implement a certain waiting period after you have been accepted. During that waiting period, if you do not experience any symptoms, or receive treatments, medications or advice for the medical condition or any related conditions, then you will be covered for the medical condition when that particular waiting period is up.
But what if I do experience any symptoms, or receive treatments, medications or advice for the medical condition or any related conditions?
It will depend on the insurer, but it will be either these options:
- You will be accepted still BUT that medical condition will not be covered.
- You will have to pay a loading (extra premium) if that medical condition is covered.
- You will be rejected entirely.
Coming back to the situation that if you are severely overweight. Most insurers will treat severely overweight as a medical condition. Therefore by going through a Moratorium underwriting, you do have a chance of being accepted.
But keep in mind that you cannot have an insurance application submitted and rejected prior to doing Moratorium underwriting. In other words, it must be your first time ever applying for insurance.
Nevertheless different insurers have different ways of underwriting; as a result, it will be worth it if you go through every single one that is available in order for you to see the available options.
Build a comfortable “safety net”
Without insurance, the financial risk is huge. Imagine paying for hospital bills or forking out money for chemotherapy by using your hard earn savings. It will definitely affect you and spoil any future plans.
That is why insurance was created. It is to protect you from any financial risk and enable you to recover from an unfortunate event.
Unfortunately, for certain life insurance, you have to answer the medical questionnaire and might go for a medical test as well. If you are severely overweight, there is a very small chance that you will be accepted. Hence equaling to no insurance coverage.
Fret not; there is another way for you to build your own payout benefit a.k.a your “safety net”.
Not all insurance policies will require you to undergo a medical questionnaire. Guaranteed Issuance Option (GIO) policies are insurance policies that do not require you to declare your health condition. In other words, you will surely be accepted. Endowment, retirement plans are examples of GIO policies.
Consequently, you have a chance to build your own “safety net” with a GIO plan. Accumulate the money that you put in and eventually have a ready sum of money for any emergency.
Do be aware that these GIO plans are not flexible and withdrawing the money prematurely might result in getting lesser money that you have put in. But nevertheless the pros of building your emergency fund in a GIO fund will be:
- Earning better interest compared to putting a bank account.
- You are disciplined and not withdraw your money unnecessarily.
- Over time if you do have a good healthy life, you can convert that money for your retirement fund instead.
How much you will need? There is no definite answer but one thing for sure; you rather have more than less. Thus, do not make the mistake of under planning or miscalculating your shortfall.
Being prepared for an accident.
Accidents are unpredictable and unforeseen therefore it is something that you cannot avoid. As a result, it is useful for you to have a personal accident plan.
Personal accident plans will give you payouts according to the benefit table given. The range of benefits will differ among insurers.
For example, you will get a payout if you are disabled after being involved in an accident. Or your family will get a death benefit if you happened to be a casualty of an accident.
Most personal accident plans are classified as general insurance. That is good news as that will mean that you do not have to declare your health condition when you decide to get one.
Although the payouts under a personal accident plan is not a big amount, it is one option you can undertake if you are severely overweight since you do not have to declare your health.
When there is a will, there will be a way
The suggestions above are a few steps that you can take if all else fails for you in your previous attempts in getting insurance coverage. Do not hesitate in finding help and getting advice from a professional.
It might be a tiring process but it is a necessary one. You might not lose a lot if you keep on finding solutions. But you might lose everything if you give up on searching for alternatives.
Hope that this article was useful. Do share it with your family and friends. Till next time.
Disclaimer:
I am a financial adviser but I am not your financial adviser. Therefore, what is posted on this website, are my opinions and NOT to be taken as financial advice. Information provided might be relevant at this period of time but may be irrelevant due to alterations to rules, regulations or policies. The information provided is true to the best of my knowledge, but there maybe omissions, errors or mistakes.
