As we all know, insurance companies are in the risk assessment business. But not all risks are the same. Especially when it comes to life insurance. So insurance carriers quantify risk levels with a simple rating system.
Life insurance rates classes
Most life insurance carriers have four rate classes. Typically, the four primary rate categories are:
- Preferred Best
- Preferred
- Select
- Standard
If you’re buying a policy from an insurance agent, the goal is to figure out which rate class you’ll be approved at, and which insurance company offers you the best rate for your rate class. “Preferred Best” is the best rate you can get. If you qualify for this rate, you should be paying the lowest price for your coverage.
Rated life insurance policies
A “rated” life insurance policy is a policy that is also often referred to as a “substandard” policy. A person with less than average health or who has a high-risk occupation may receive a rated or substandard policy. This type of policy will have higher premiums than a standard policy. Rated policies are usually identified with a letter or number (ex. Standard Table B or Standard Table
What to do about a rated life insurance policy approval
If you applied for the policy through a broker, you’ll want to ask your agent if there’s any way to get a better rate class if you went with a different carrier. An experienced agent should be able to determine if this request is doable, rather quickly. And if your agent does believe that you can get a better rate with another insurance company, you might not even have to re-take your medical exam. You might have to fill out additional paperwork, but that’s a small trade-off if you can get a better rate for your new policy.
Now that you’ve got the facts, give us a call at 800-442-9899! We’re old school so you’ll have to speak with a real person, but we’re guessing that’s the type of service you’d expect.
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