When you apply for term insurance, the premium may depend on more than the amount of life cover you choose. Factors such as age, health, medical history, lifestyle, occupation and smoking status can form part of an insurer’s underwriting assessment.
Technology is also changing how insurance applications can be processed. AI-enabled underwriting and digital health tools may help insurers assess information more efficiently, but underwriting requirements and pricing ultimately depend on the insurer, product and applicant’s individual risk profile.
Understanding how factors such as BMI and overall health may be assessed can help you make a more informed decision when applying for term insurance.
What Is AI Underwriting in Insurance?
Underwriting is the process an insurer uses to assess the risk associated with providing insurance cover to an applicant. The assessment can influence whether an application is accepted, whether additional information or medical tests are required and the premium or terms offered.
AI-assisted underwriting can use technology to help analyse application information, identify patterns and support aspects of risk assessment. It may also help insurers identify cases requiring additional review.
However, AI does not necessarily mean an instant or fully automated decision. Depending on the applicant, product and insurer’s underwriting requirements, medical tests, supporting documents or manual assessment may still be required.
Does BMI Affect Term Insurance Premiums?
BMI can be one of several health-related factors considered during life insurance underwriting, but it does not determine a term insurance premium on its own.
Body Mass Index, or BMI, is a measure based on a person’s weight relative to height. Insurers may consider it alongside other information such as age, medical history and other health or lifestyle factors.
A BMI outside an insurer’s preferred underwriting range may result in a request for additional health information or medical assessment. However, there is no single universal relationship between BMI and term insurance premiums because underwriting standards can differ between insurers and individual cases.
If you want to understand your BMI, you can use a BMI calculator. Remember that BMI is a screening measure and does not provide a complete assessment of an individual’s health.
What Health Information Can Wearables Track?
Smartwatches and fitness trackers can capture a range of health and activity indicators, depending on the device and its capabilities. These may include:
- Heart rate: Tracks heart rate over time.
- Daily steps: Estimates movement during the day.
- Sleep: May estimate sleep duration and patterns.
- Physical activity: Can record workouts and activity levels.
Wearable-device readings can provide useful personal health and fitness insights, but they should not automatically be treated as a clinical assessment or a substitute for medical evaluation.
Importantly, owning or using a wearable does not mean its data will automatically be used to determine your life insurance premium. Whether health or wearable data is requested or considered depends on the insurer, product, underwriting process, consent requirements and applicable rules.
Can AI and Health Data Affect Insurance Underwriting?
AI and digital tools may support insurers in reviewing application information, identifying patterns and highlighting cases that require further assessment. However, AI-assisted underwriting does not necessarily result in a lower term insurance premium.
AI-assisted underwriting may help make parts of the underwriting process more efficient, but it does not necessarily result in a lower term insurance premium.
Term insurance pricing and underwriting can consider multiple factors, including:
- age;
- health and medical history;
- smoking or tobacco use;
- occupation;
- sum assured;
- policy term; and
- other factors considered under the insurer’s underwriting guidelines.
BMI may form part of this broader health assessment. If an insurer requires additional clarification, it may request medical information or tests before making an underwriting decision.
Similarly, data from a smartwatch or fitness tracker should not by itself be interpreted as proof that someone is either “healthy” or “unhealthy”.
What Should You Know Before Sharing Health Data?
Health information can be highly personal, so consumers should understand what information is being requested, why it is needed and how it will be used.
Before providing health information:
- Understand what is being requested: Check which health or medical information is required for the application.
- Read the privacy notice: Understand the stated purpose for collecting and processing the information.
- Check consent requirements: If additional digital or wearable information is requested, understand whether providing it is mandatory or optional in that particular process.
- Provide accurate disclosures: Answer the insurer’s health and lifestyle questions accurately and completely.
- Don’t substitute wearable readings for requested medical information: A fitness score or smartwatch reading should not be assumed to replace medical information required by an insurer.
How Should You Compare Term Insurance Plans?
Premium should not be the only consideration when choosing term insurance.
Before purchasing a plan, consider:
- whether the life cover is adequate for your family’s needs;
- policy duration;
- premium and premium-payment requirements;
- benefits included;
- exclusions;
- claim process;
- available payout options; and
- applicable underwriting requirements.
Health information may influence underwriting differently across insurers, so one insurer’s assessment or quote should not automatically be assumed to apply to another.
When you’re ready to evaluate cover, compare term insurance plans based on your protection requirements, policy features, exclusions and applicable terms, rather than premium alone.
Conclusion
AI and digital technologies are changing aspects of insurance underwriting, while health factors such as BMI may form part of an insurer’s broader assessment of an applicant.
However, BMI, AI or wearable data should not be viewed as standalone predictors of your term insurance premium. The outcome depends on the insurer’s underwriting guidelines, the product and the applicant’s overall risk profile.
Understand your health information, make accurate disclosures and compare term insurance based on your family’s protection needs, policy terms, benefits, exclusions and affordability. Technology can support the application process, but an informed insurance decision should begin with understanding the cover you need.
