BMI is a reliable indicator of total body fat, which is related to the risk of disease and death - but it does have limitations.
BMI Limitations
One problem with using BMI as a measurement tool is that very muscular people may fall into the "overweight" category when they are actually healthy and fit. Another problem with using BMI is that people who have lost muscle mass, such as the elderly, may be in the "healthy weight" category - according to their BMI - when they actually have reduced nutritional reserves. This number can also be misleading for pregnant or lactating women.
BMI, therefore, should be used as a general guideline to monitor trends in the population, but by itself should not be used to diagnose an individual's health status. Further evaluation must be performed to determine his or her weight status and associated health risks.
Sources:
www.niddk.nih.gov/health/nutrit/pubs/statobes.htm#what
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