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Overweight people pay a hefty price

Carrying extra weight can mean you pay more for things like health care and life insurance -- and you may even end up with a lower paycheck. Overweight? You'll pay more for life insurance
The fat flap at Southwest Airlines (LUV, news, msgs) gained worldwide media attention. Two passengers were prevented from boarding a flight last summer after refusing to adhere to the airline's long-standing policy requiring overweight customers to purchase two seats. Southwest eventually gave the passengers a refund. But for the nearly two-thirds of Americans who are overweight or obese, carrying extra pounds can come at a much higher price.

Obesity is associated with chronic diseases, several types of cancer, sleep apnea and osteoarthritis, among other things, says Eric Finkelstein of RTI International, a nonprofit research firm. Money 2004. Smarter, faster and easier than ever.

Medical costs associated with treating these diseases are expensive.

Overweight people "spend $700 more per year than normal Americans, and when you total the overweight and obese population, you're looking at approximately $93 billion greater annual expenditures," Finkelstein says.

Passing along the cost The bulk of those expenses are passed on to all Americans in the form of Medicare, Medicaid and higher costs for their employers' group medical plans.

But overweight Americans who are self-employed often bear those health-care costs alone.

"If you're applying for individual health insurance, the weight situation may become critical and may increase your premium significantly and may even eliminate you from being able to purchase coverage," says Bill Simons of the Rust Insurance Agency in Washington.

The larger your size, the more likely your life insurance premium will soar, too.

"It could easily be double, triple or up to five times the normal premium," Simons says.

This can be true even if you're overweight and otherwise perfectly healthy.

At State Farm Insurance, a 35-year-old male who doesn't smoke and is 5 feet 10 inches tall can weigh as much as 251 pounds without paying an extra premium. But tipping the scale at 252 pounds would cost him an extra premium of $2.65 for every $1,000 of coverage. That's about 18% more than normal.

Unable to get insurance
"Eventually you could reach the point where you're declined because you're so far overweight no one is going to insure you," says Simons.

That's even more likely when it comes to disability insurance, since the odds of becoming disabled are much higher for the overweight.

The obese also often have smaller incomes to pay those bills.

"People assume that the reason that fat people are poor and thin people are rich is because when you're poor you can't afford health clubs or you eat food that's high in calories because that food is cheaper," says Esther Rothblum, a psychology professor at the University of Vermont. "Our research shows the opposite direction."

That is first you're fat and because you're fat you don't get into elite colleges, you don't get good jobs and you don't get promoted, Rothblum said. As a result, your income is low, making the so-called fat tax an even greater burden.

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