Life Insurance Risk Classifications Explained

When looking into a life insurance policy, it is often difficult to know precisely the premiums you will pay until your policy goes through the underwriting process. 

During the life insurance underwriting process, you will eventually be given an insurance risk classification that will determine the actual cost of your policy.

How do the life insurance underwriting risk classifications work?

Life insurance rate classes are part of every insurance company’s life insurance underwriting process.

Your risk classification in insurance and the eventual premiums you pay for coverage will ultimately depend on the details of your overall health.

Remember that many agents give quotations based on the best insurance rate class without asking you enough health questions to win your business.

However, the insurance rate class you get at the end of the application process is what matters!

life insurance classifications

Life Insurance Health Classifications

Here are the common names associated with the rate classes available in the life insurance industry. 

life insurance table rating chart

Preferred PlusTable A = 25% above standard rates
PreferredTable B = 50% above standard rates
Standard PlusTable C = 75% above standard rates
StandardTable D = 100% above standard rates

*We are only showing  A, B, C, and D in this table rating chart

We have also provided helpful descriptions of each underwriting risk classification.

Hopefully, these general life insurance underwriting classifications will help clarify where you fit into the life insurance health classes.

The preferred plus life insurance requirements

  • An applicant who receives a preferred risk classification will pay the lowest premiums. It would help if you had excellent overall health to qualify.
  • You are free of any tobacco for 3-5 years.
  • You do not engage in risky occupations or hobbies like scuba diving or aviation.
  • 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 before the age of 60

Preferred risk Life Insurance Rate Class

  • Applicants that receive preferred life insurance rates generally have excellent overall health and do not participate in dangerous activities.
  • Medications like blood pressure, and cholesterol, are allowed, and family history guidelines are slightly more lenient with the preferred risk category.

Standard Plus Life Insurance Rate Class

  • The standard plus insurance risk class is associated with optimum health, but you may have minor health issues.
  • You may be slightly over the life insurance height and weight chart, but you also have no family history of diseases.

Standard risk Insurance Rate Class

  • The standard risk insurance rate class generally applies to those with average overall health.
  • You are taking multiple medications.
  • You do not fit within the published life insurance height and weight chart
  • You also have a family history of cancer or other diseases

 substandard risk category

  • Another substandard risk classification name is impaired risk or table-rated life insurance.
  • The substandard risk class refers to people who have significant health impairments.
  • Depending on their risks, these individuals may have to pay an extra fee or “table rating” to the issuing life insurance company.

These insurance risk classes are general guidelines, and many insurance companies have different rules to qualify for each rate class.

If you participate in a hazardous occupation or risky hobbies like sky diving or scuba diving, you must disclose them to your agent.

Many agents may forget to ask you or fail to realize that these endeavors can bump you into a substandard risk class.

This is why it is essential to work with an experienced agent familiar with the underwriting classes of many companies.

This will allow you to be matched with a company specializing in your type of risk at the best possible price. 

life insurance classificationsBuying Life Insurance

People seeking life insurance should always be prudent in their search to find the best prices in today’s marketplace.

Most people want to know how to get the cheapest premiums with the least time and effort.

life insurance underwriting classesApply with No Exam Required

Several life companies offer the very best rate class without doing an exam, provided that you are in excellent health.

Pacific Life, Lincoln Life, and Banner Life offer considerable death benefits without doing a physical.

These three highly-rated life companies offer rates at the exact cost of their fully underwritten term policies.

For example, taking high blood pressure medication is eligible for the same preferred plus or preferred risk category (without taking an exam).

The same goes for how no-exam life insurance carriers classify cholesterol treatment. Almost all life insurance companies allow a preferred plus rate class for those prescribed medications for cholesterol.

Instead of an exam, your underwriting information is gathered through traditional underwriting sources, including; an application, a MIB check, a motor vehicle report, and your prescription drug records.

However, the premiums with some no-exam companies can be more expensive because the insurance company cannot measure your risk factors accurately.

These companies underwrite on a pass/fail basis, and any “yes”  answer can get you turned down even when you are in perfect health.

risk classification in insuranceApply by Taking the Exam

In most cases, fully underwritten policies requiring an exam are cheaper because companies consider your overall medical history when applying for life insurance coverage.

Just because you have a medical condition does not mean you will be a substandard risk or need to pay higher rates.

If you can demonstrate that you are following your doctor’s orders, you can also receive a similar life insurance rate class to healthy applicants.

 life insurance underwriting classes

Getting the Best Insurance Risk Classification

  • Provide your agent with as much information about your needs and budget.
  • Then, your medical history is assessed to determine which company may be best for your medical history and budget.
  • Then, we start the application process by having you complete a life insurance blood pressure test, urine and blood sample, and height and weight measurement.
  • It is helpful to have the following medical information put together for your examiner:
    • Have the name, address, and phone number of your regular doctor
    • Check with your physician to ensure they have all the documentation for your treatments.
    • Keep a current list of all medications and the dosage for each prescription.
  • Then, we will order the required medical summary from your regular doctor.
  • Finally, your medical profile is presented to multiple life insurance companies to determine which can offer you the best rates.
  • Ask your agent to shop for additional offers if you are not approved as quoted. Many insurance companies can use your exam.

Case Study

Here is a practical example showing the difference in price between the two companies.

Peter is in excellent health at 52 years old and is considering a 2o year term for a $500,000 policy.

 

 An (Exam)

B (No Exam)

Rate ClassPreferred PlusStandard
Premium$1,034$1,938

Company A requires a brief exam and issues Parker a policy with a preferred plus rate class, while company B does not require an exam but only permits a standard risk insurance rating.

A 10-minute exam equals nearly $1,000 in savings per year for Peter, with nearly $20,000 in savings over 20 years!

life insurance health classificationsWorking with an Independent Agent

Many buyers are unaware of which companies offer the best life insurance rates. 

Working with an independent broker eliminates the hassle of shopping around to get quotes.

Your independent agent will help guide you to the company with the lowest premiums based on your complete medical history.

We have found that the best insurance company for someone with hypertension may not be right for someone needing life insurance with diabetes.

We offer very affordable rates on both term insurance and universal life insurance.

Term Life InsuranceTerm life offers guaranteed death benefits and level premiums for between 10 and 40 years.

Universal Life InsuranceThis form of permanent life insurance with the premium and death benefit guaranteed for your entire lifetime.

Feel free to use our DIY life insurance calculator to compare term or permanent life insurance in minutes.

risk classification types

Compare Life Insurance Quotes

FAQ

Many industry experts recommend the death benefit on your policy should equal 10 times the amount of your annual income.

When determining how much life insurance you need, it is helpful to first ask yourself a few questions:

  • How much financial strain will your death cause to your family?
  • Does your spouse also work?
  • Do you have other forms of income which would continue when I pass away?
  • Do I have group life insurance coverage available through work?
  • Do you want life insurance to pay off your mortgage?
  • Could your family survive without any life insurance?

So, the amount of life insurance you really need will depend on your current financial situation and what type of lifestyle you want your family to have if you die.

Getting great rates on life insurance with a pre-existing medical condition can be relatively easy or more difficult depending on the details of your specific medical condition.

With many common treatable conditions like hypertension, cholesterol, depression, and diabetes it is possible to get approved with excellent rates. 

We have the niche company relationships and proven strategies to secure the absolute cheapest prices available if you are being treated for one of these common ailments.

Are you are attempting to get life insurance for pre-existing conditions that are more serious?

Then, we always recommend doing a little more preliminary research to hopefully get the coverage with the rates you deserve.

We use clinical underwriting to help you obtain life insurance for pre-existing conditions that are more complicated like heart disease and cancer.

Let us help you by applying our knowledge of life insurance underwriting to find you the cheapest life insurance policy based on your health and lifestyle.

 

The underwriting time varies depending on whether your agent recommends the no exam or exam underwriting process.

In some cases, it may only take a week to approve your policy!

However, if a medical exam and medical records are needed from your doctor the normal time is 2-3 weeks from the time you take your examination.

You will not save any money by buying directly from the life insurance carrier. The premiums you obtain will be the same directly through the insurance company, or with an independent agent.

Plus, if you apply with the life insurance company directly, and you are approved at a higher rate, you either take their offer or start the entire process over with another insurance company.

 

Affordable Life USA can always shop your policy with other companies to see if your offer can be improved upon. Since we are an independent agency, we are not controlled by any insurance company.

Our comprehensive life insurance search engine will compare cheap term insurance quotes from over 100 quality insurance companies.

Our life insurance calculator provides you with instant life insurance quotes without entering personal information, financial information, or medical history. 

Our free life insurance comparison software will give a rough idea of how affordable coverage can be for your family!

Eventually, we may collect more health information to provide you with the most accurate quotes possible.

Most of the time, your final policy will be within 10% of what we quoted you online.

If we can’t quote you because of more complicated health history, one of our advisors will work with you personally to provide a more customized proposal for you.

There are a lot of factors to contemplate when determining whether or not to replace an existing life insurance policy.

Shopping for a more reasonable life insurance policy is a good idea, particularly if you bought your policy several years ago.

Life insurance rates have fallen dramatically, so you might be amazed at how much you can save.

Here are some key things to think about:

  1.  How much coverage do you have now?
  2.  What is the new replacement cost for that coverage?
  3.  Are you happy with your current policy’s terms and riders?
  4. How long would it take you to get a new policy in place?
  5.  Are there any particular circumstances that would make replacing your policy a priority
  6. Would you be interested in exploring other types of life insurance policies (e.g., term vs permanent)?  

Life Insurance Underwriting Tips

  • Affordable Life USA, LLC is an independent insurance agency that sells life insurance directly to clients across the United States.

    Its founding member, Eric Van Haaften, has sold life insurance for over 33 years. Eric has been featured in renowned publications such as Time, Newsweek, Us News, and The Wall Street Journal. 

    Our team of experienced insurance agents and financial planners is dedicated to finding the right coverage for your needs and budget. 

    Start searching for the perfect life insurance policy using our online calculator. We consistently update our rates to ensure you can access competitively priced options from many highly rated life insurance companies. 

    Affordable Life USA, LLC

    Eric Van Haaften, LUTCF

       Eric Van Haaften, LUTCF

    1-877-249-1358

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