When looking into a life insurance policy, it is often difficult to know exactly the premiums you will pay until your policy goes through the underwriting process. Many agents give quotations based on the best rate class in order to win your business.
However, the risk classification or rate class the life insurance company gives you at the end of the application process is what really matters.
Here are some helpful descriptions of each classifications or rate classes available in the insurance industry. Please use Life Insurance Quotes using these health guidelines to evaluate some sample quotes.
Life Insurance Rate Classifications:
- Preferred Plus/Super Preferred – The preferred plus life insurance rate class states that you are in overall excellent health, you are free of any type of tobacco for 3-5 years, and you do not engage in a risky occupation or hobby’s like scuba diving or aviation. In addition, you have no history of drug or alcohol abuse You must also have no history of heart disease (sometimes cancer) among your parents or siblings prior to their age 60.
- Preferred – The preferred rate generally apply to those who are in excellent overall health and do not participate in dangerous activities. A few medications are allowed like blood pressure, cholesterol, and family history guidelines are slightly more lenient.
- Standard Plus – While associated with optimum health, but you may have minor health issues. You may be slightly over the height and weight guide, but you also have no family history of diseases.
- Standard – You are of average health and take multiple medications. Your height and weight guidelines do not meet the requirements, and you have a family history of cancer or other diseases.
- Substandard – This life insurance rate class refers to people who have significant health impairments. These individuals may have to pay an extra fee depending on the risks they pose to the issuing life insurance company
These rate classes are general guidelines and many insurance companies have different rules to qualify for each rate class.
If you participate in a a hazardous occupation or risky hobby like sky diving or scuba diving, it is important to disclose it to your agent. Many agent may forget to ask you or do not realize that these endeavors can also bump you into a higher priced rate class.
This is why it is important to work with a financial planner with a working knowledge of the underwriting guidelines of many life insurance companies. This will allow you to be matched with a company specializing in your type of risk at the best price.
How do you Obtain the Best Classification available?
- Use an experienced agent/broker who represents many life insurance companies.
- Take an exam to get the best rate. Many companies do not requiring an exam, but have much higher rates and underwrite on a pass/fail basis.
- Provide as much detail about your health, so the proper company can be used to obtain the best offer for you.
- Provide your agent with as much information about your needs and budget for a proper plan can be determined.
- If you are not approved as quoted, ask for your policy to be shopped around for additional offers. Your one exam can be used by many insurance companies.
If you need help with understanding how your health history may influence your life insurance rates give us a call 1-877-249-1358.