What is a life insurance risk classification?
The risk classification, also known as a risk class, is used to determine the premium on your life insurance policy. Four main factors are used to determine the total premium – your age, the amount of coverage, the number of years the coverage is guaranteed, and the risk class.
How is the risk class determined?
Every life insurance company has different underwriting guidelines that determine what risk class an individual qualifies for. The company will look at your personal medical history, smoker status, height/weight profile, results of the medical exam, your family medical history (e.g. cancer or heart disease before age 60 in the immediate family), motor vehicle record, and any hazardous activities you may participate in (such as aviation, scuba diving, drag racing, etc).
Since every company has different guidelines for qualification, one might offer a better risk class than another based on the above information, resulting in a lower premium for the same coverage.
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 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, but with the use of tobacco products in the past 12 months. Some companies offer non-smoker rates for smokers life insurance if only using chewing tobacco or 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 only using chewing tobacco or 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 I know which risk classification I qualify for?
Our instant quoting system allows you to input general medical conditions to see what rates you may qualify for with 45+ of the best life insurance companies. Click the banner at the top or bottom of the page to get your personalized instant quote. For a more specific evaluation, please give us a call at 1-800-571-2980 or e-mail us at Info@terminsurancebrokers.com and we will be happy to review the available options with you in further detail.