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Are you too fat for life insurance?

First the good news: if you've picked up a little weight over the winter, chances are your life insurance won't be too badly affected. Any more than that, then you'll have to cut the fat, or your insurers will charge you for it.

The bad news is, as a nation, we're getting fatter. This is a huge problem for the life insurance companies, because obesity leads to a host of other serious health problems.

"People who are obese are at a higher risk for serious conditions like heart disease, Type 2 diabetes, osteoarthritis (a common joint disorder) and certain kinds of cancers," said Dr. Don Behan, Senior Research Associate at Georgia State University's Center for Risk Management and Insurance Research. "When insurers are evaluating a person, his or her length of life is often discussed in terms of life expectancy. Mortality depends on age, gender, health status, habits such as smoking and drinking alcohol and participation in dangerous activities. Mortality rates may be estimated on the basis of these characteristics."

Obesity is determined by the amount of body fat a person has relative to their muscle, bone and organ tissue. The sum of body mass is a simple mathematical calculation determined on your height and weight, and compared to a standardized body mass index (BMI) chart. The Centers for Disease Control and Prevention list an overweight adult having a BMI between 25 and 29.9. An obese adult would have a BMI of 30 or higher.

Hypothetically speaking, if a male nonsmoker, age 55 wanted to get about $250,000 of life insurance and had a BMI of 38, he would be paying an estimated annual premium of $4,256. If a 55-year-old nonsmoker male with a BMI under 30 wanted the same amount of life insurance, he would pay $3,767 annually, according to Dave Redpath, Assistant Vice President of Underwriting at Hartford Life. While these are estimated numbers the fact remains; the higher the BMI, the harder your wallet will get hit—not just for life insurance, but paying for potential health problems down the line.

How personal impacts your life insurance

Filing for bankruptcy is usually person's worst nightmare, but when it comes to protecting your assets (including the value of your life insurance policy), information is key.

A life insurance policy is considered valuable property, which means creditors may attempt to "acquire an interest in the policy's values," but all states and the federal government have "enacted legislation providing protections for life insurance against the claims of creditors," says Glenn E. Stevick, Jr., a professor with The American College.

 Here's some basics you should know when it comes to bankruptcy and how it affects your life insurance policy.

First, more people file for bankruptcy than you might imagine. With the latest economic downturn and mounting bills, the current bankruptcy-filing rate is at a 5-year high, according to recent data released by Automated Access to Court Electronic Records (AACER). What's more, the American Journal of Medicine reported that more than 1.5 million people filed bankruptcy last year, 60 percent of those filings were the direct result of medical bills.

The American Journal of Medicine, for example, found that 1 in 25 people in the Bay Area have filed for bankruptcy last year, says bankruptcy attorney, Jeena Cho of San Francisco-based JC Law Group.

"It's like the dirty little secret," Cho says. "Two things that we don't talk about are death and money. When people start talking about their financial issues, they find there are plenty of people in the same boat."

There are two types of bankruptcy for individuals: Chapter 7 and Chapter 13.

Chapter 13 is where you can hold on to your assets and aren't at risk for losing property, but you must repay some of the debt over a three to five year period. If your cash value for life insurance is worth more than the exemption in your state, then consider filing Chapter 13 to protect your assets, Cho recommends.

If you pass a means test and can file a Chapter 7, you must liquidate your possessions and assets, which typically takes four months. It also means your life insurance policy could be affected.

Cho says one of the worst things someone can do is liquidate their assets and start borrowing money from their life insurance and retirement funds, which are almost always protected in bankruptcy.