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The Basics

Lose weight, fatten your wallet

Cutting back on the lattes, avoiding the vending machines and exercising regularly can pay off --  up to $2,489 a year. Oh, and you might live longer.

By SmartMoney

If you're hoping to lose weight in 2007, let us offer an added -- and most likely unexpected -- incentive. Losing just 15 pounds not only will make you feel better: It will make you wealthier, too.

By our estimates, you'll gain $2,489 by dropping those pounds, although just how much you'll reap will obviously depend on your specific situation. Here's how you'll beef up your wallet while slimming down:

Latte factor: $783

"Consider the costs of that unhealthy habit," says Barbara O'Neill, co-author of "Small Steps to Health and Wealth," a financial and weight management series produced by Rutgers Cooperative Extension. Sugary snacks aren't just padding your waistline, they're also depleting your wallet.

Swap out that 16-ounce Starbucks Cinnamon Dolce Latte ($4.40, 340 calories) for the same size black coffee ($1.89, and a mere 10 calories) every workday, and you'll save $653 a year. Hitting up the vending machine? Skip the Cheetos ($1 and 160 calories) and bag an apple from home (about 50 cents and just 44 calories) to save another $130 a year.

Life insurance: $275

Losing a little weight can do plenty for your health. Just a few of the touted benefits: increased energy, lower cholesterol and blood pressure and reduced risk for heart disease, diabetes and stroke.

That in, turn, can lower your life insurance premiums.

"There's no reason consumers shouldn't see some tangible financial reward for doing something that the industry acknowledges will enable them to live longer," says Steven Weisbart, an economist with the Insurance Information Institute. Depending on other aspects of your health, losing 15 pounds can be enough to push you from a standard rate to a preferred one. And that's a big difference in price. A 40-year-old male nonsmoker with "standard" risk would pay $615 a year for a 20-year, level-term $500,000 policy. If he were healthy enough to qualify for the "preferred" risk rate, his premium would drop to $340.

If you're asking your insurer for a policy reassessment based on improved health, expect a physical exam -- and lots of questions, says Weisbart. "If the weight loss is rapid, that's a red flag," he says. Insurers tend to reward only healthy weight loss. It's unlikely you'll get an improved rate if your sleeker physique is the result of weight loss drugs, illness or an unsustainable crash diet.

Health insurance: $680

Most insurers consider your body-mass index, or BMI, before offering you insurance, says O'Neill. (BMI is a measure of body fat based on a calculation of your height and weight.) Insurers generally will not offer coverage to someone with a BMI of 39 or greater, according to the Department of Managed Health Care, a California-based government organization.

Overweight or obese consumers may pay up to 30% more for premiums. Considering that the average consumer pays $2,268 for individual health coverage, losing weight could cut your annual costs by as much as $680.

Health-care costs: $151

If you're overweight, reducing your body weight by 10% can lower your lifetime medical costs by $2,200 to $5,300, according to the U.S. Department of Health and Human Services. Exactly how much you'll save will depend on other aspects of your health -- and whether you can keep the weight off.

Live for another 35 years, and you'll see annual savings of about $151.

Employer incentives: $600

"Employers are at their wits' end trying to manage rising health-care costs," says Linda Cushman, a senior health-care strategist with Hewitt Associates, a global human-resources services firm. About 70% of a given employee's health-care costs comes down to lifestyle, she says, so it's no surprise that employers want healthy (and cheap) employees. "It doesn't hurt that if people are healthy, they're going to be at work more often," she points out.

More than 40% of employers offer some kind of financial incentive for engaging in healthy behaviors or achieving healthful goals. Employees at Las Vegas-based Sierra Pacific Resources, for example, earn monthly bonuses of up to $50 if they complete a health screening, meet set criteria for cholesterol, blood pressure and BMI, and don't smoke. And at Westinghouse Electric in Monroeville, Pa., workers receive an annual bonus of $200 for doing 10 minutes of aerobic exercise three times a week for at least nine months of the year.

Lose weight -- at a discount

Savings start even before you've dropped those 15 pounds. Most employers -- 81%, to be exact -- offer wellness incentives such as fitness club discounts, says Linda Cushman of Hewitt Associates. Reader's Digest, for example, reimburses employees for 50% of the cost of annual health-club memberships, up to $250 per year.

And if your employer offers health care through a major insurance provider, you may be entitled to further deals. Aetna, for example, offers 15% off Jenny Craig memberships and 25% off eDiets.com. And Oxford Health Plans deducts 10% to 15% off certain home fitness equipment as part of its Healthy Bonus initiative.

This article was reported and written by Kelli B. Grant for SmartMoney.

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