Life Insurance Health Classifications | How They Directly Affect Your Premiums in 
What are life insurance health classifications? You have probably heard the terms Super Preferred, Preferred Plus, Preferred, Standard Plus, Standard, and a few more. 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?
This is because 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 Classification Effects On Rates?
- Should I Contact an Independent Agent/Broker to Help Me?
- In Conclusion
How Are Life Insurance Health Classifications Calculated?
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 rate 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. Doing this allows you to change health classes back and forth with the drop-down menu to see how much life insurance rates vary.
Life insurance rates and 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.
Can a Medical Pre-Screen Help Me Receive the Best Life Insurance Health Classification?
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 applies 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, hazardous occupations, and sports.
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. Pre-screen results will indicate the best company to apply to.
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.
Why Do Underwriters Use These Health Classifications?
Life insurance companies use health classifications to properly 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, weight, 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, 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 to 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 chainsaw operator for a logging company. He skydives as a hobby and drinks over six mixed drinks daily would be a much greater life insurance risk. The life insurance company would take a much greater gamble than 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 reflecting a considerable difference in premiums.
What Determines a Specific Health Classification?
Health History – If an applicant has no pre-existing condition and has no family history of cancer or heart disease. Also, if he does not take any prescription medications and is standard in height and weight.
Life insurance companies give 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 rate 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 regarding 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 premiums. However, your class could fall into the standard if you are more than just a little overweight. You can even go into the rate table, which we will discuss in this article. Remember 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 yearly, quickly declining.
Family Health History – Your 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 life insurance companies take it very seriously. Close family members passed away before they were 60 years of age.
Also, heart problems or various cancer forms will raise a red flag. They are looking for a track record of 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 – Life insurance underwriters pay close attention to alcohol consumption and abuse. This can lead to early death if people fail to control their drinking. Many people that drink alcohol slowly start abusing alcohol. You can consume alcoholic beverages without a problem, but they must be within reason, so you are not destroying your health.
On the other hand, drugs 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, and Heroin are out of the question, where you will indeed be declined.
What Health Classifications Could I Be Assigned?
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, the best classification you can 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 meager 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 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 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 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 possible rate increase is 250% without being declined, which is usually rare. Such a high rate increase could be costly, but the main concept is that you would still be insured.
Can Smoker Rate Classifications Increase My Premiums?
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 where an insurance company will place you. You will always pay more for using tobacco because of the health risks tobacco has been known to cause.
Preferred Smoker is the best of the two rate classes for smokers. You will 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. Remember to 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.
Can Vaping Also Affect My Life Insurance Health Classification?
With most companies, vaping will place you into a tobacco rate class. This will drastically increase your rates, just like cigarette smoking. Given all the dangers and risks of vaping, we highly recommend quitting vaping to prevent severe respiratory issues. 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. I can easily see life insurance companies cracking down on vaping. This is because so many young people are dying yearly from vaping effects.
Examples of Health Classifications and How They Affect Premiums
Our example will use our 30-year-old male (non-smoker) with a 20-year 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. 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. Your health class, otherwise known as your rate class, is essential.
How Can I Compare Health Classification Effects on Rates?
Our instant quoting system has a drop-down menu with four health classifications. You will instantly see how 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 show how these life insurance rates and health classifications work in real-time.
Should I Contact an Independent Agent/Broker for Help?
There are two kinds of agents to choose from. The first is an independent agent or a broker, which is what we are. The second is a captive agent who usually works for a company such as State Farm. Independent agents do not work for insurance companies like captive agents. Instead, an 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 companies 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 their importance when seeking the best insurance rates. Like any other insurance product, life insurance is never a one size fits all product.
Take your time and understand the many life insurance products available to you. Contact us today and we will happily answer all your questions without obligation.
All the best,
If you have questions about life insurance health classifications, contact us today to help you at 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.