What are life insurance health classifications? You have probably heard the terminology such as Super Preferred, Preferred Plus, Preferred, Standard Plus, Standard, and a few more such terms. These are referred to as life insurance health classifications. But, you may ask yourself, what is this all about, and why is this so important?
The reason is these assigned classifications will directly determine your premiums. So, if you are interested in getting the lowest rates, you should learn a little about them and how they work.
It would help if you understood this basic terminology to help you better get the lowest rates possible. Simply using the most appropriate life insurance companies can make a big difference in receiving the best life insurance classification.
Table of Contents
- What is a Life Insurance Health Classification?
- How Are Health Classifications Calculated?
- Can a Medical Pre-Screen Help Receive the Best Health Class?
- Why Do Medical Underwriters Use These Classifications?
- What Determines a Specific Health Classification?
- What Health Classifications Could I Be Assigned?
- Can Smoker Rate Classifications Increase My Premiums?
- Can Vaping Affect My Health Classification?
- Examples of Health Classes and Their Effect On Premiums
- How Can I Compare Health Classifications Effects On Rates?
- Should I Contact an Independent Agent/Broker to Help Me?
- In Conclusion
Your current health history will mainly determine your life insurance health classification. Paying the lowest premium possible for your life insurance is what it’s all about. This article will show a comparison of 3 rates classes and their premiums. This will show you just how vital your assigned health classification will be. It is crucial when shopping for the best life insurance rates.
You will be surprised how much these risk classes have on your premium. You can also activate our life insurance quoting engine and compare life insurance quotes. By doing this, you can change the health classes back and forth with the drop-down menu to see how much the life insurance rates vary.
A life insurance rate classification and a life insurance health classification are the same. They are referred to both ways but have the same meaning. Think of them as nothing less than risk categories.
A simple medical pre-screen can help you receive the best life insurance health classification. If you have a basic knowledge of health classifications, you can help yourself, and your agent apply with the best life insurance company. Keep in mind that all companies underwrite their applications differently. Some carriers will be more liberal concerning health conditions or hazardous occupations and sports.
This means that some companies will offer you a better health classification than others. The way to do this is to have your agent run a 5-10 minute pre-screen and then effectively shop the life insurance market. The pre-screen results will indicate the best company to apply with.
Receiving the best underwriting classes you can achieve will allow you to secure the lowest premium. Therefore, choosing the carrier that will issue you the best classification is vital to saving money.
Life insurance companies use health classifications to assess the risk properly they are undertaking. All applicants are different in one way or another. Some people are healthy, and some have a few minor health conditions. Some even have some life-threatening severe medical issues which complicate the underwriting process.
This also holds for their height and weight and tobacco use or not. Also, having hazardous occupations or sports that could take their life. These dangerous occupations and sports can also change your health classifications. Since each person’s possible risk can vary, the application has to be broken down into these risk categories.
An Example of Underwriting Classes
We will create two fictitious applicants for this example: Joe is a 30-year-old non-smoker, has no health problems. He has perfect height and weight and has a safe job as an electrical engineer. He only plays golf as his sport and would not represent much of a severe risk for life insurance. Therefore, he may qualify for “Preferred Best” rates.
On the other hand, Bob is a 30-year-old cigarette smoker. He works as a chain saw operator for a logging company. He skydives as a hobby and drinks over six mixed drinks a day would be a much greater life insurance risk. The life insurance company would be taking a much greater gamble than they would with our other example with Joe.
Bob may only qualify for a “Standard” health classification. As you can see, these two people would have a health class that would reflect a considerable difference in premiums.
Health History – If an applicant has no pre-existing conditions and has no family history of Cancer or heart disease. Also, if he takes no prescription medications and is standard in height and weight.
The life insurance company gives them a thumbs up in this significant area of underwriting criteria. The applicant could very well be on his way to preferred rates.
Tobacco Use – Tobacco use, especially cigarettes, will significantly impact life insurance rates. Without any shadow of a doubt, it has been proven that smokers do not usually live as long as non-smokers. Smoking cigarettes can double or triple your rates with no problem at all.
If you are looking for low super preferred rates and smoke cigarettes, it will not happen. Smoking is a very negative detail to have on your application.
Lifestyle – Your lifestyle about sports, hobbies, and occupation is essential. Suppose you are into sports and hobbies such as scuba diving, skydiving, drag racing, rock climbing, bungee jumping, boat racing, motorcycle racing, and aviation. In that case, you could find higher rates because of these dangerous activities or hazardous occupations.
Height / Weight – Your height and weight are critical when applying for life insurance. Many people do not realize this until they apply. Life insurance companies build charts that show the recommended weight for each height category.
If you are slightly overweight, you may go from preferred rates to standard plus, increasing the premiums. However, if you are more than just a little overweight, your class could fall into the standard. You can even go into the rate table, which we will also go over in this article. Keep in mind that your height and weight are just as important as your health history.
This is because your health will be based on your height and weight when looking at statistics. This is based on how weight affects overall health and lifespan. Many life insurance applicants are overweight or morbidly obese every year, which quickly declines.
Family Health History – Your family health history refers to your parents and siblings. This is to see if there is a noticeable history of health conditions like cancer or heart disease. You have no control over this, but the life insurance companies take it very seriously. Close family members passed away before 60 years of age.
Also, heart problems or various forms of cancer will set off a red flag. They are looking for a track record in your immediate family. This could indicate that you would have a greater chance of being diagnosed with one of these potentially fatal diseases one day.
Alcohol / Drug Use – The life insurance underwriters pay close attention to alcohol consumption and abuse. This can lead to an early death if people fail to control their drinking. Many people that drink alcohol slowly start abusing alcohol. You can consume alcoholic beverages with no problem, but they have to be within reason, so you are not destroying your health.
On the other hand, drugs that your doctor does not prescribe are another story. Alcohol abuse offers many dangers to your health and is taken very seriously when applying for life insurance. Marijuana smoking is usually acceptable when used in moderation. Chemical drugs such as Cocaine, Methamphetamine, Heroin are out of the question where you will indeed be declined.
The primary health classifications are:
- Preferred Plus
- Standard Plus
- Standard Classes
- Smoker Rate Classes
- Sub-Standard Rate Classes
Preferred Plus Rates – Also known as Super Preferred, which is the very best classification you could receive. About 10% of applicants can qualify for Preferred Plus. You have to be in excellent health with the proper height & weight ratio, and your family history is clean and right on the money.
Preferred Rates – Preferred is an excellent rate class to be in. Preferred will entitle you to have very low rates, not quite as reasonable as Preferred Plus but still very competitive. You could have some minor issues like high cholesterol and high blood pressure. But it has to be controlled with medication. Most healthy people fall into this category if they are in good shape.
Standard Plus Rates – This is still an excellent rate class if you have a few health issues or possibly some height and weight abnormalities. Many people fall into this rate class, especially if they are in their 40s, 50s, or 60s. Their health is starting to have some health conditions that are perfectly normal in these age groups. You would still have to have a good family health history stemming from your parents.
Standard Rates – In the Standard class, you would be experiencing some problems with height and weight, your medical tests are no longer squeaky clean, and you might have a small list of medical conditions that are not terrible, but you have to keep your eye on them.
The Standard class is prevalent for people in their 50s and 60s but, the rates are still very affordable. As you get older, your health is naturally going to be affected. But this effect is perfectly natural, and this is unavoidable as your age progresses.
Substandard Rates With Table Ratings
The Substandard rate class is not a specific rate class like the others above, but it is a scale of table ratings based on your health history graded by letters or numbers that would typically be either the letters A-J or numbers 1-10. This is generally because you have a more severe health history or you’ve had some recent medical setbacks, such as a heart attack, heart surgery, a diagnosis of diabetes, or other complicated health problems.
A Health Class Listed in “Standard” Will Have an Additional 25% for Every Step With Table Rates
- A = Standard + 25%
- B = Standard + 50%
- C = Standard + 75%
- D = Standard + 100%
- E = Standard + 125%
- F = Standard + 150%
- G = Standard + 175%
- H = Standard + 200%
- I = Standard + 225%
- J = Standard + 250%
The maximum rate increase possible is 250% without being declined, but this is usually rare. Such a high rate increase could be costly, but the main concept to consider is that you would still be insured.
Cigarette smokers can often expect to pay 250% or more premium dollars than non-smokers. If you smoke tobacco products, there will be two smoker classes an insurance company will place you in. You will always pay more for using tobacco because of the health risks tobacco has been known to cause.
The Preferred Smoker is the better of the two rate classes for smokers. You would qualify for this rate class if you are an occasional smoker or use smokeless tobacco. Such as snuff or leaf-type tobacco.
The Standard Smoker class is where you would fall for regular cigarette smoking and steady cigar smoking. We highly recommend people give up smoking and improve their health. Keep in mind that you purchase a life insurance policy with a smoker’s rate and quit smoking.
You can always request that your smoking rate be eliminated. Your rate class can be changed to a non-smoker, drastically reducing your life insurance premiums.
With the majority of the companies, vaping will place you into a tobacco rate class. This will drastically increase your rates, just like cigarette smoking. With all of the dangers and risks of vaping, we highly recommend quitting vaping to prevent severe respiratory issues down the road. Lung damage from vaping has been found in concise experiences, making it worse than tobacco use.
As the months go by, vaping is developing a worse reputation than ever before. I can easily see the life insurance companies cracking down on the subject of vaping. This is because so many young people are dying every year from the effects of vaping.
Our example will use our 30-year-old male (non-smoker) with a 20-year term life insurance quote. We will use a face amount of $250,000. Also, we can compare one extreme to another, starting with Preferred Plus, Standard, and Standard with the highest table rating. Also, life insurance flat extra fees can be added for hazardous occupations and sports.
- Protective Life – $153.73
- Lincoln National – $155.00
- American General – $156.50
- Banner Life – $157.49
- United of Omaha – $162.50
- Lincoln National – $267.00
- Banner Life – $267.49
- American General – $271.50
- Protective Life – 274.15
- Transamerica – $275.00
Standard (Rate Table 10 or J)
- Banner Life – $660.22
- United of Omaha – $842.50
- John Hancock – $929.25
- Protective Life – $959.53
- John Hancock – $980.36
These are the top 5 rates for each of the three rate classes. Notice the extreme difference between our Preferred Plus premium of $153.73 to the Standard rate table 10 of $660.22.
This is otherwise known as the letter J, depending on what company you are quoting. The health class, otherwise known as your rate class, is essential.
Our instant quoting system has a drop-down menu with four health classifications to choose from. You will instantly see how the rates change when you toggle through the four classes. We constantly shop the market for the company that will offer our applicants the best classification.
This demonstration will perfectly show how these life insurance rates and health classifications work in real-time.
There are two kinds of agents to choose from. The first is the independent agent, otherwise known as a broker, which is what we are. The second is a captive agent who usually works for a company such as State Farm. The independent agents do not work for insurance companies like the captive agents do. Instead, the independent agent can shop the entire life insurance market to find you the lowest rates.
The captive agent can shop his only market, the company he works for. The independent agent has his client’s best interest in mind, whereas the captive agent has his company’s main interest. We work with over 40 of the highest-rated companies in the nation to ensure our clients are placed with the best company and the lowest premiums. As a result, the right company will be established and in the best life insurance health classification.
Now you know what life insurance health classifications are and how important they are when seeking the best life insurance rates. Like any other insurance product, life insurance is never a one size fits all product. Take your time and understand the many types of life insurance products available to you. Contact us today, and we will be happy to answer all your questions with no obligation.
All the best,
If you have any questions about life insurance health classifications, contact us today to help you with no cost or obligation. Remember that we are brokers and work for our clients, not insurance companies. Our job is to help you get approved for the best policy for your needs with the lowest rates possible. You can also set up a time at your convenience to talk.