Making healthy choices, like being more active and not smoking, is great for your physical and mental health. There’s also another way you can benefit from taking care of your health: lower business insurance premiums.
That’s right, your health can affect your business insurance premiums (not just your health insurance!). The healthier your lifestyle is, the cheaper your insurance premiums will likely be. The opposite is also true: fewer healthy choices lead to poor health, which usually results in more expensive insurance.
Savings from lower premiums can add up significantly over several years, so it’s worth making healthy lifestyle changes if you want to make your insurance more affordable.
Whether you’re looking for new business insurance or renewing your current policy, here are 5 ways your health and lifestyle can affect your premiums and coverage.
1. Health Issues Increase Risk of Injury
If your employees have ongoing health problems, there is a higher risk of a workplace injury or incident.
For example, someone with back problems is more likely to cause an accident or injure themselves further. Being overweight also increases the risk of injuries. In one 9-year study, obese workers were 25% to 68% more likely to experience strains, falls, fractures, and other injuries compared to workers with a normal weight.
The more incidents that occur, meaning the more claims that your business makes, the higher your premiums for liability insurance and workers’ compensation are going to be. That’s because your claims history is one of the factors that’s considered when determining premiums.
2. A Healthy BMI Can Lower Your Premiums
Studies show that the risk of chronic diseases, like type 2 diabetes and heart disease, increases when BMI is 30 or higher. For policies that insure an individual (e.g. key person, income protection, or trauma insurance), insurance providers factor in a person’s BMI when calculating insurance premiums.
All insurers offer discounts if the individual’s BMI is within a healthy range (discounts range between 5% and 30% depending on insurer and type of policy). On the flip side, a high BMI is one of the most common medical reasons for higher insurance premiums.
3. The Importance of Medical Declaration on Insurance
It might be tempting not to declare a pre-existing condition for fear that it will raise your premiums. But that’s even riskier since insurers can exercise their right to reject your claim in case of an incident.
It’s better to pay more in premiums than to find out that your insurance won’t help you when you need it most because you didn’t disclose important health information.
4. Smoking and Vaping Can Double Your Insurance
Smoking or vaping will not prevent you from getting insurance. However, it can raise your insurance premiums by up to 100% compared to a non-smoker’s premiums. It’s an expensive habit, both for your health and for your pocket.
The reason why smoking causes such a significant rise in premiums is that it’s one of the most harmful lifestyle habits. It’s been linked to multiple types of cancers, heart disease, stroke, and lung disease, among other chronic health problems.
To insurers, smoking increases their risk exposure since a smoker is more likely to make a claim. Note that insurers consider vaping the same as smoking, so you will still pay higher rates even if you only use e-cigarettes.
You must disclose whether you smoke or vape when applying for business insurance, even if you’re a casual or occasional smoker. If you’ve smoked or vaped at all in the last 2 years (or 1 year, for some insurers), and you do not declare it to the insurer, then they have the right to reject any future claims.
While not disclosing the truth may seem appealing to save money, it can be a very costly mistake should they find out that you have smoked or vaped. Do you really want to take the risk?
5. Healthier Habits = Cheaper Premiums
If you have healthier habits, you’re less likely to have health conditions that might raise your premiums, you’ll enjoy affordable non-smoker rates, and you’ll likely have fewer past claims (more claims result in higher premiums). In other words, healthier habits get you cheaper business insurance premiums.
Some insurers go as far as offering discounts, cash rebates, and other incentives to members who sign up for wellness programs, get regular health assessments, go to the gym, and take up other healthy habits.
Get The Right Business Insurance With PCR Accounting & Advisory
In addition to taking care of your health, finding the right insurance provider can also save you money. At PCR, we can help you find the most comprehensive and affordable business insurance that’s tailored to your needs.
We start by understanding your business needs and the risks you face, then recommend suitable insurance solutions. With our network of trusted insurance providers, you’re sure to get reliable and competitively priced coverage.
Contact us on 03 9847 7516 to get expert business insurance advice and recommendations.
Disclaimer: This blog post is for informational purposes only and should not be considered as financial or legal advice. Consult with a qualified professional for personalised guidance based on your specific circumstances.
Owner of PCR Accounting & Advisory, Peter Marmara-Stewart is a top-tier accountant and financial advisor dedicated to helping clients reach their business goals and achieve financial freedom. Peter is highly regarded for his client-focused approach and entrepreneurial spirit, catering to a diverse range of professionals across a wide scope of industries all across the country. Peter’s expertise can help you plan effectively, set goals, maximise profits and protect your assets. Get in touch today on (03) 9847 7516.
