How do Life Insurance Health Class Ratings Work  

Your health class rating is of the utmost importance when determining how much you will pay in premiums your life insurance coverage.  An insurance company will determine your health class rating when the underwriting process is complete.  They will use tools such as: the medical questionnaire included in the application, paramedical test results, information from the Medical Information Bureau, DMV records and possibly your medical records to determine your health class rating. They will also consider the lifestyle choices you make such as smoking, alcohol consumption, any high risk hobbies you engage in or if you travel to any countries that are considered dangerous. Insurance companies are very thorough in their underwriting approach so that they can adequately determine the risk you pose as a policyholder.

What Does Each Rating Mean? – Once the underwriting process is complete, the insurance company will give you a health class rating.  It is important to note that not every company uses the exact same underwriting criteria. For instance, some companies might give “Preferred Plus” ratings to those with normal cholesterol levels that are being treated with medication while others will not. With that said, here is a general description of each class from what is considered the best health rating down to standard.

Preferred Plus Non-Smoker – This is rating is for an applicant in optimal health.  They have an excellent height/weight ratio, normal cholesterol and blood pressure levels (usually untreated), no occurrence in parents or siblings of heart disease or cancer prior to age 60, clean driving record for the last 5 years, no dangerous hobbies, no tobacco in last 5 years and no history of substance or alcohol abuse.

Preferred Non-smoker – This rating is a bit more liberal than preferred plus.  There is usually a slightly higher threshold for cholesterol and blood pressure levels that will qualify even if treated with medication. The height/weight ratio is a bit more liberal as well.  Sometimes an insurer may allow preferred rates if there is one occurrence of cancer or heart disease in a parent before the age of 60. They may allow two moving violations in the last 2 years or one DWI in the last 5 years. They usually require no tobacco or nicotine products for the last 2 years and no substance or alcohol abuse in the last 10 years.

Standard Plus Non-Smoker – Slightly more liberal height/weight ratios, cholesterol levels and blood pressure levels allowed as well as a personal and family history of impairments compared to preferred plus.  The insurer may allow 3 moving violations in the last 3 years but no DWI’s in the last 3 years.  They usually will require no tobacco or nicotine products in the last 12 months and no substance or alcohol abuse in the last 7-10 years.

Standard Non-Smoker – This is reserved for those with average health and normal life expectancy.  Height/weight ratios are very liberal as well as elevated cholesterol and blood pressure levels.  The insurer may allow one death of a parent from heart disease or cancer before age 60. They might allow 4 moving violations in the last 3 years but no DWI’s in the last 2 years. They will usually require no tobacco or nicotine products in the last 12 months and no substance or alcohol abuse in the last 7 years..

Preferred Smoker – Characteristics similar to preferred non-smoker but with use of tobacco or nicotine based products in the last 12 months.

Standard Smoker – Characteristics similar to Standard non-smoker but with use of tobacco or nicotine based products in the last 12 months.

Again, these are just example descriptions of each health class rating as each company has their own underwriting guidelines and some are more liberal than others.  That is why it is best to shop your case so that you can find the company that will best rate your policy for the lowest premium.

What if You are Classified Lower Than Standard?

If you happen to fall anywhere below a standard rating, you will be considered “table rated”.  What does this mean?  Standard is the benchmark in terms of “normal” life expectancy. Anything below that will call for substandard rates or “table rates”.  Table ratings are reserved for those who have current impairments or have had health issues in the past such as severe asthma, cancer, diabetes, heart attack or severe sleep apnea just to name a few.  The ratings will usually go from table A to J or 1-10 depending on the company.  Each additional table increase is usually by 25% over standard risk class as follows:

• Table A or 1 Rating: Standard + 25%
• Table B or 2 Rating: Standard +50%
• Table C or 3 Rating: Standard +75%
• Table D or 4 Rating: Standard +100%
• Table E or 5 Rating: Standard +125%
• Table F or 6 Rating: Standard +150%
• Table G or 7 Rating: Standard +175%
• Table H or 8 Rating: Standard +200%
• Table I or 9 Rating: Standard +225%
• Table J or 10 Rating: Standard +250%

The table rating given for an applicant will depend on the insurer’s perceived risk associated with the impairment.  For instance, some companies will treat serious impairments more favorably than others.  They may serve a “niche” for applicants with diabetes or cancer.  It is important to work with an independent agent that knows which companies have the most favorable rates for those with specific health issues.  Some companies will also allow a “table shave” with certain products.  For example, if you were given a table rating because of a past impairment but otherwise you currently exhibit healthy habits and lifestyle, the insurer may be willing to improve your health rating.  Some companies are willing to go from table 3 or C all the way up to standard!  An experienced agent will know which companies provide a “table shave” opportunities to applicants.

What are Flat-Extras? – Outside of your health, the insurance companies will also look at such factors such as your occupation or hobbies you might have that are considered dangerous.  If you have an occupation or hobby that is deemed dangerous by the insurance company, you might be required to pay an additional “flat-extra”.  This is an additional amount of premium that is required per thousand of coverage.  Here’s how flat-extra works.  Let’s say you have a 20 year term policy for $500,000 of coverage that costs you $600 in premium per year.  If you engage in a dangerous hobby, an insurer could impose an additional $2.00 flat-extra per $1000 of coverage.  So if you had $500,000 in coverage, it would result in an extra $1,000 (500 x $2.00) in premiums per year.  Your yearly premiums would then be $1,600 ($600 + $1000) for $500,000 of coverage.  Each insurance company has its own interpretation of occupation or hobby risk, so flat-extra amounts will differ from company to company for various occupations and hobbies.  That is why it is important to use an independent agent that can shop your risk to find you the best rate if you have a dangerous occupation or hobby.

Conclusion – Since there are so many variables that go into determining your life insurance health rating, it is best to shop your case to multiple insurers. We have access to over 40 insurance companies that we will shop for you to find you the best rate for your particular situation.  We would welcome the opportunity to work your case.  Please feel free to give us a call at (888) 687-9444 or email us at info@archstoneagency.com if you have any questions.

Archstone Insurance Services, LLC is an independent agency that shops over 40 of the top life insurance carriers to provide huge savings on life insurance coverage for our clients.  We are happy to answer any questions you might have about any of the insurance products we offer, your planning needs or your existing coverage.  Feel free to call us directly at (888) 687-9444 or email us at info@archstoneagency.com.  You can also visit our website at www.archstoneinsurance.com.