How Do Life Insurance Rate Classifications Work?

Life insurance rate classifications are used by companies to classify people in different categories that essentially determine their risk of dying. The best category and lowest price is “Preferred Plus “, followed by “Preferred”. Prices keep rising with “Standard Plus” and “Standard “. To be honest, only the healthiest people in America are rated Preferred Plus. The average person will qualify for a standard rate. The classifications vary from company to company, which is why it´s a good idea to shop around. The point is you do have control over lifestyle choices that can hurt your health. You should take a proactive approach and work at staying healthy, at the gym and at the doctors’ office. Life insurance companies will reward you for it!

What are the different risk classifications?

Life insurance risk classifications are relatively uniform throughout the industry, with some minor variations. The most common risk classes are as follows:

Preferred Plus / Preferred Elite

Superior health, normal height/weight profile, no chronic illnesses, lab results within a normal range, no immediate family members died from heart disease or cancer before age 60.

Preferred

Excellent health. Height/weight may be a little over the most preferred range, treatment for high blood pressure or high cholesterol usually acceptable, lab results normal or slightly abnormal

Preferred Smoker

Same general guidelines as preferred, except for the use of tobacco products in the past 12 months. Some companies offer non-smoker rates for smokers’ life insurance if an applicant only uses chewing tobacco or occasionally smokes cigars.

Standard Plus

Better than average health. Height/weight may be higher than normal

Standard

Average health, normal life expectancy. Height/weight may be on the high side, possible treatment for several minor conditions, one or more parents died from heart disease/cancer before age 60, slightly elevated lab results (such as higher than normal blood pressure or cholesterol).

Standard Smoker

Same general guidelines as standard, but with the use of tobacco products in the past 12 months. Some companies offer non-smoker rates for smokers’ life insurance if an applicant only uses chewing tobacco or occasionally smokes cigars.

Substandard

Below average life expectancy, high-risk life insurance. Height/weight may be considered obese, treatment for chronic illnesses or major health conditions (such as prior heart attack, cancer, diabetes), abnormal lab results. Substandard ratings are expressed as a “table rating”, usually designated as Tables A-J or 1-10. Each additional table increase is usually a 25% increase over the standard risk class rates, or as follows:

Table A rating: Standard rate + 25%
Table B rating: Standard rate + 50%
Table C rating: Standard rate + 75%
Table D rating: Standard rate + 100%
Table E rating: Standard rate + 125%
Table F rating: Standard rate + 150%
Table G rating: Standard rate + 175%
Table H rating: Standard rate + 200%
Table I rating: Standard rate + 225%
Table J rating: Standard rate + 250%

How do you know which risk classification you qualify for?

If you’re unsure of which risk classification you qualify for, how much coverage you need, or how long the term should be, send us an email or call our licensed agents at (800) 521-7873. To compare quotes, simply click get a quote and you will be taken to a page that asks you to answer a few, simple questions to complete the form for an instant FREE quote.