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Life Insurance Risk Classification

What Are Life Insurance Risk / Rate Classes?

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The rate you’ll pay for your life insurance is determined, in large part, by the rate class you qualify for. If you qualify for the best rate class (often referred to by most carriers as “Preferred Plus”), your rate or your cost for life insurance will be the lowest available.

There are many different rate classifications; the life insurance company’s underwriters decide which one you qualify for based on your individual health, lifestyle, and family history profile. Since qualification criteria varies among the numerous insurance companies, it is not uncommon for an individual to qualify for different rate classes at different insurance companies.

Most carriers have four primary rate classes. Typically, the four rate categories are:

  • Preferred Plus – Preferred Best
  • Preferred
  • Standard Plus – Select
  • Standard

People who have more than just minor health problems fall into a fifth substandard category. The substandard category covers a series of several class called Table ratings. Table rated policies are usually identified with a letter or number (ex. Standard Table B or Standard Table 4). And pricing will typically go up 25 percent per table over Standard rates.

Rate Class * Basic Pricing
Preferred Plus / Best 50% of Standard
Preferred 63% of Standard
Standard Plus / Select 86% of Standard
Standard Standard
Table Ratings
Table 1 / A +25% over standard
Table 2 / B +50% over standard
Table 3 / C +75% over standard
Table 4 / D +100% over standard
Table 5 / E +125% over standard
Table 6 / F +150% over standard
Table 7 / G +175% over standard
Table 8 / H +200% over standard

* Discount percent shown for Rate Classes is an average and varies by carriers and Policies. Most carriers use +25% per table over standard for Table Ratings. At least one carrier bases their Table Rates as over Standard Plus.

Life Insurance Class or Life Insurance Underwriting Class and Life Insurance Risk Classes are all sometimes used to describe the rating system used by the life Insurance industry.

Rate Classes Defined

The list below is only a guide which will vary from carrier to carrier. No Guarantees are made as to how you will rank with individual carriers based on your health or your family’s health history.

Preferred Plus

  • Excellent overall health
  • Must have a clean driving record
  • Must be tobacco / nicotine-free 3 to 5 years
  • No history of drug or alcohol abuse
  • No family history of health related death, heart disease or cancer prior to age 60
  • Must not engage in any hazardous activities (Private pilot, skydiving, race car driving, etc.)
  • No illegal activities or history (Felony)

Preferred

  • Excellent overall heath
  • Must have a good driving record
  • Must be tobacco / nicotine-free 2 to 3 years
  • No history of drug or alcohol abuse
  • No family history of health related death or heart disease prior to age 60 (some cancers allowed)
  • Must not engage in any hazardous activities (Private pilot, skydiving, race car driving, etc.)
  • Well-controlled blood pressure or cholesterol (min 1 year)
  • No illegal activities or history (Felony)

Standard Plus

  • Good overall health (better than average)
  • Minor weight issue (BMI <28)
  • Must have a good driving record
  • Must be tobacco / nicotine-free at least 1 year
  • No history of drug or alcohol abuse
  • Family history – minor health issues related to heart disease or cancer prior to age 60
  • Must not engage in any hazardous activities (Private pilot, skydiving, race car driving, etc.)
  • Minor blood pressure and or cholesterol issues (monitored)
  • No illegal activities or history (Felony)

Standard

  • Good overall health (average)
  • Minor weight issue (BMI <30)
  • Must have a good driving record
  • Must be tobacco / nicotine-free at least 1 year
  • No history of drug or alcohol abuse
  • Family history – loss of 1 parent or sibling prior to age 60 from health related issues.
  • Must not engage in any hazardous activities (Private pilot, skydiving, race car driving, etc.)
  • Minor blood pressure and cholesterol issues (monitored)
  • No illegal activities

Substandard

This rate class, actually a series of several rate classes are called Table Ratings. People with less than average health, or who have high-risk occupations may receive table rated policies. A policy with this type of rating will come with higher premiums than a “standard rated” policy. Table ratings are usually identified with a letter or number (ex. Standard Table B or Standard Table 4). Pricing for table rated policies typically go up 25% per level over the standard rates.

The terms Rated life insurance and Table Rated life insurance are commonly used to describe a policy that falls into the substandard rate class for life insurance.

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’s for your rate class. “Preferred Best” is the best rate class you can get. If you qualify for this rate class, you should be paying the lowest price for your coverage.

Factors that can affect your Rate Class

  1. Smoking or tobacco intake. One of the most expensive habits you can have, premium-wise. A cigarette smoker, on average, can be asked to pay up to 50% more than a non-smoker. Quitting tobacco will help bring your rates down, but only after a lengthy observation period. Most insurance firms wait at least 1 year before offering a partial rebate, and a full 3 years before allowing for parity in terms of premium rates.
  2. Obesity. By itself, obesity isn’t a cause for an increase in premium rates, but because obesity more often than not results in heart issues and/or diabetes, it is considered a major determinant when calculating insurance premiums. If your Body Mass Index (BMI) is even slightly over what is considered healthy, your premium rates will reflect this. It is advisable to make sure you aren’t overweight when going in for your medical checkup, and make sure your recent medical records don’t allude to obesity either, because they will be checked.
  3. Other medical conditions. Cancer, cholesterol, asthma, cardiovascular disease, and even depression can disrupt your premium rates drastically. Anything that is indicative of a history of ill health can be detrimental to your insurance premium. The underwriter will investigate your family history too, because certain ailments like diabetes and Thalassemia have been known to pass on through hereditary or genetic means.
  4. Driving records. An individual’s driving record is taken into consideration when calculating life insurance rates. If the individual in question has a propensity for violating traffic laws, then it is assumed that he or she is a bigger risk in terms of life expectancy, and the premium will definitely reflect that. The more innocuous violations, like parking tickets, won’t usually affect insurance rates, but accidents and more serious offenses will.
  5. Profession. People with more dangerous jobs such as motor sport racers, pilots, and construction workers are more likely to meet with a fatal accident on the job. As a result, they’ll pay more. The dangers you put yourself in on a daily basis will definitely impact your insurance rates.
  6. Extracurricular activities. Your hobbies can also impact your insurance rates. If you enjoy sky diving, bungee jumping, and other recreational activities that could be deemed adventurous or dangerous, they will end up costing you.

If you can change or improve any of these primary factors, you could qualify for a better rate class. And if you shop for your policy at a company that offers competitive rates from multiple top-rated carriers, like AccuQuote, the odds will be in your favor to get the life insurance coverage that best suits your lifestyle.

Common Health Conditions and Rate Class

The chart below covers many common health conditions, and shows the relative Rate Class a person with the condition is likely to qualify for under ideal conditions. Most conditions must be well controlled or in remission at least 2 years to qualify for the rate class shown. Each insurance company is somewhat different, in how they classify and qualify individuals for each rating class.

Life Insurance Rate Classes and Common Health Conditions
Health Conditions Preferred Plus Preferred Standard or Standard Plus Substandard Table Rated Uninsurable for Traditional Coverage
Aids X
Alcohol / Substance Abuse (sober at least 2 years) X
Alcohol / Substance Abuse (current) X
Arthritis (Osteo) X
Arthritis (Rheumatoid) X
Asthma (Allergy) X
Asthma (Steroid Meds) X
Autistic Child X
Blood Thinners X
Blood Pressure (controlled) X
BP and Choleserol (Controlled) X
Bronchitis X
Cancer (Basel cell) X
Cancer (non Basal cell) X
Cardiovascular / Heart Disease X
Cholesterol (controlled) X
Crohn’n Disease X
Depression (on-going) X
Depression (situational) X
Diabetes X
Diabetes (A1C>10.1) X
Emphysema X
Epilepsy X
Heart Attacks X
Hepatitis A or B X
Hepatitis C X
Irritable Bowel Syndrome (IBS) X
Kidney / Liver Disease X
Kidney Dialysis X
Mental Illness X
Mutiple Sclerosis X
Stroke X
Sleep Apnea (CPAP Compliant) X
Ulcerative Colitis X
This table is a guide only and subject to change without notice. This chart is based on individuals with a single condition and no other health issues. Most conditions must be well controlled or in remissionn at least 2 years to qualify for the rate class shown.


Insurers can refuse to provide life insurance at any rate at their discretion.

Quotes for Life Insurance

Since AccuQuote has access to many different insurance companies, along with their published and unpublished guidelines, we can help you select which one will likely offer you the best rates.

Call AccuQuote today at 800-442-9899 and we’ll help you figure out what kind of policy makes the most sense for your needs. You can also click the button below to get a free Life Insurance quote. It’s quick and easy.

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