Life Insurance Policy Risk Categories

When you decide to purchase a life insurance policy, the first thing the insurance company does is assess your coverage needs. The purpose of their assessment is to determine your risk level, which will correlates to the premium rates you’ll have to pay for your policy. For this reason, life insurance companies have established categories into which they sort applicants to gauge their risk levels; health history, current health, and lifestyle choices are among the criteria used to build these categories. If a person doesn’t fit into one of the risk level categories, due to particular lifestyle factors or health issues, they are assigned a “table rating” instead. Table ratings are often accompanied by higher premium rates.

The first step to follow after you apply for life insurance is to go for a medical exam. You will often be asked to complete a survey to gather information about your lifestyle as well, with questions such as, “Do you smoke?” or “How often do you exercise?” The information that your life insurer gathers about your lifestyle choices, in addition to your medical exam test results, and your family health history will all be compiled to determine your risk classification. Different insurers may use different terminology, but for term life insurance policies, the categories are along the lines of: Preferred Select, Preferred, Standard Plus, and Standard. Oftentimes there are additional classifications for smokers, such as Preferred Smoker and Standard Smoker.

A Breakdown of the Basic Classifications

Preferred Select: Other terms for this classification are “preferred elite,” “super preferred,” or “preferred plus.” Applicants who fall into this category are in excellent health, are of normal weight and height profile, and don’t have any lifestyle or health history factors that suggest significant risks to their health, such as a family member dying of cancer at age 50.

Preferred: Applicants in this category are also found to be in excellent health, but may have a few specks on their health record, such as slightly high cholesterol or blood pressure.

Standard Plus: Applicants who are of generally optimal health, but have a clear health condition that prevents them from being classed as preferred, such as high blood pressure or being overweight, fall into this category.

Standard: Applicants with a normal life expectancy and who are of average health usually fall into this category. These applicants generally have some health issues, such as being somewhat overweight. Applicants who fall into this category usually have family health history factors in addition to their own health profile, such as having lost a parent to disease before age 60.

Preferred Smoker: If an applicant would otherwise be classified as “Preferred,” but is a smoker, they will usually be classified as a Preferred Smoker. Even those who smoke occasionally, such as a person who smokes a celebratory cigar every now and then, may be classified as a Preferred Smoker.

Standard Smoker: Applicants who would otherwise fall into the “Standard” category, but are smokers, are usually classified as Standard Smokers. Due to the fact that tobacco use is the leading cause of preventable death in the US, Standard Smoker policies are usually more expensive than Standard policies, because those who don’t smoke are much less of a risk to the insurer than those who do.

Applicants Who Don’t Fall into a Category

Just because you don’t fall into one of these categories, it doesn’t mean you’re not able to obtain life insurance coverage. Although you’re unable to be classified by the general standards, either due to health issues or lifestyle choices, insurers are able to rate applicants on an analysis of their individual coverage risks. This type of classification is called “Table Rating.” Table Ratings are usually designated by a letter or number, and that rate determines the additional percentage that the applicant will have to pay if their life insurance policy is approved.

A Breakdown of Table Ratings

Table Ratings are for applicants who have elevated risks that prevent them from being classified by the general criteria, and allow insurers to still offer insurance policies to these applicants, but at a higher premium rate. Usually, applicants who are given Table Ratings have definite health conditions, meaning that they’re stable conditions that are unlikely to change (such as diabetes or other diseases). For example, in addition to the standard life insurance policy rate, applicants can expect to pay the following, according to their Table Rating:

  • A: +25%
  • B: +50%
  • C: +75%
  • D: +100%
  • E: +125%
  • F: +150%
  • G: +175%

How Your Table Rating is Determined

Depending on your health conditions, insurers will assign you a Table Rating. Some conditions that will deem you eligible for a Table Rating include (but are not limited to): diabetes, morbid obesity, and a heart attack occurring within the last five years. A key point to Table Ratings that must be understood is that if you have a condition that requires you to be given a Table Rating, it must be a stable condition. This means that if you had a heart attack last month, and apply for a life insurance policy, you will likely be rejected until enough time has passed for medical professionals to consider your heart condition “under control.” Insurers will not give you a policy if your condition appears to be one that will progressively become worse, because that will cost them money.

How to Obtain Life Insurance Coverage

Even if you’re denied by one life insurance provider, you may still be able to obtain coverage through another provider. There are a number of life insurance companies that are known for working with people who have existing health conditions, and can often offer more affordable rates and a wider variation of coverage with consideration to different criteria than others. If you have an existing health condition, obtaining coverage is incredibly important to protect yourself and your family. Bear in mind, your health history isn’t the only thing that can lead insurers to assigning you a Table Rating—if you have a history of DUIs or other crimes, you may be classified with a Table Rating.

Having a provider like is a great tool for people who may run into obstacles while trying to acquire a life insurance policy, because we connect you with all of the leading insurers. Being able to compare the different policies that are available to you helps you make the best decision for yourself and your family.

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