Life Insurance Health Classifications + YouTube Video

Life Insurance Health Classifications: Understanding Their Impact on Your Rates in [2024] + YouTube Video

Are you ready for some good tips on getting the lowest life insurance premiums? This article will reveal the meaning of life insurance health classifications and how they directly affect your rates.

We work with over 40 top-rated life insurance companies to help find you the lowest premiums.

Your assigned health classification plays a significant role in determining your rates. The better your classification, the lower your premiums.

We can guide you through the process, helping you understand the factors that influence your classification and providing personalized solutions to improve it.

Take the first step towards securing affordable life insurance coverage from the highest rated insurers. Contact us for professional advice on the health classification that will yield the most affordable premiums for your next life insurance policy. 

 

How Underwriters Use Life Insurance Health Classifications

Software applications utilized by underwriters suggest the appropriate rate class after the applicant’s medical history has been entered. Your current health history will be the single most important factor by far when determining your health class.

The other main important factors the underwriters consider would be, do you use tobacco such as smoking cigarettes, do you have a hazardous occupation or do you have a dangerous sport or hobby?

The more information your agent knows, the better he can help you. The objective is to pinpoint the correct life insurance companies that will offer the best rate class which will generate the lowest premiums after the underwriting process has been completed.

Some companies are very liberal where other life insurance companies will be more aggressive with their underwriting guidelines.

 

What Are Life Insurance Health Classifications? + YouTube Video

 

Can a Health Assessment Help Me find the Best Rates?

A simple health assessment can help determine which company to use based on your specific health and lifestyle. Diving blind into a life insurance application will usually create unwanted surprises later. 

The more your agent knows, the better your chances of having a happy ending and enjoying low rates when you begin paying your premiums. Just like the Boy Scout motto from many years ago “Be Prepared“.

A health assessment, otherwise known as a pre-screen, is just an informal conversation with your agent to better understand your current health history. If you have a health condition that could affect your life insurance rates, your agent needs to know about it up front before you choose a carrier to apply with.

 

Why Do Underwriters Utilize Health Classifications?

Life insurance companies use health classifications to properly assess the risk 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 life-threatening severe medical issues that can complicate the underwriting process or terminate it before it ever begins.

This also holds for their height, weight, and whether they smoke or not. Also, having hazardous occupations or sports that could possibly 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.

The rates charged by insurance companies are influenced by statistical data, and they invest heavily in obtaining this information through the employment of professional statisticians.

Examples 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 a perfect height and weight ratio and has a safe job as an electrical engineer.

He plays golf as his favorite sport and would not represent much of a risk on a life insurance application. 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. Naturally, Bob would be a much greater life insurance risk than Joe would.

The life insurance company would take a much greater gamble with Bob 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?

The specific rate class you will be placed in will be based on what the company refers to as rate standards and rate questionnaire information.

Health History:

If an applicant has no pre-existing medical condition and has no family history of cancer or heart disease. He will be heading towards preferred rates. Even if an applicant has high blood pressure or high cholesterol and his condition is kept in check by medication, he should do fine. 

Life insurance companies give this significant area of underwriting criteria a lot of importance. The applicant could very well be on his way to preferred rates with very affordable premiums.

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 and many people do not realize this until they apply. Life insurance companies have 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 a little. 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 and can be subjected to higher rates or have their application declined.

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 such as cancer or heart disease.

You have no control over this, but life insurance companies take it seriously. They also want to know if close family members passed away before they were 55 or 60 years of age depending on the carrier.

Heart problems or various forms of cancer will raise a red flag. They are also looking for a track record of your parents. This could indicate that you would have a greater chance of being diagnosed with one of these fatal diseases from inheriting their genes.

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.

If you use drugs your doctor does not prescribe, your application could be declined for using these illegal narcotics. 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 Life Insurance Health Classifications Could I Be Assigned?

The primary health classifications are:

1. Preferred Plus
2. Preferred
3. Standard Plus
4. Standard Classes
5. Smoker Rate Classes
6. Sub-Standard Rate Classes

Preferred Plus Rates: 

Also known as Super Preferred, this is 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:

Keep in mind that preferred is an excellent rate class to be placed in. Preferred rates will entitle you to lower premiums, but not quite as low 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. They’re starting to have some issues that are perfectly normal in this age group. You would still have to have a good family health history from your parents.

Standard Rates:

In the Standard class, you could 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 heart conditions, a diagnosis of diabetes, or other more complicated health problems.

 

Each Table Rating Letter Increases Premium by 25%

Life Insurance Rate Table Comparison

Rate Table Letter	Percentage Increase
A	Plus 25%
B	Plus 50%
C	Plus75%
D	Plus 100%
E	Plus 125%
F	Plus 150%
G	Plus 175%
H	Plus 200%
I	Plus 225%
J	Plus 250%

 

Can a Smoker Rate Classification Increase My Premiums?

Cigarette smokers can often expect to pay 250% or more in premium dollars than non-smokers. If you smoke tobacco products, there are two smoker classes that 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.

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 fit in for regular cigarette smoking and steady cigar smoking. We highly recommend people give up smoking and improve their health.

If you purchase a life insurance policy with a smoker’s rate and then you quit smoking. You can later re-apply for a non-smoker rate to reduce your premiums.

Can Vaping Affect My 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 smoking cigarettes. It’s easy to see why life insurance companies are 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 examples below will use a 30-year-old male (non-smoker) with a 20-year life insurance quote. We will use a face amount of $250,000. We also compare one extreme to another, starting with Preferred Plus, Standard, and Standard with the highest table rating. Life insurance flat extra fees can also be added for hazardous occupations and sports.

Preferred Plus:

1. Protective Life – $153.73
2. Lincoln National – $155.00
3. American General – $156.50
4. Banner Life – $157.49
5. United of Omaha – $162.50

Standard Class:

1. Lincoln National – $267.00
2. Banner Life – $267.49
3. American General – $271.50
4. Protective Life – 274.15
5. Transamerica – $275.00

Standard (Rate Table 10 or J):

1. Banner Life – $660.22
2. United of Omaha – $842.50
3. John Hancock – $929.25
4. Protective Life – $959.53
5. 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 rating class, is essential to getting the lowest premiums.

 

How Do Health Classifications Affect Premiums: A Look at the Differences?

Our instant quoting system has a drop-down menu with four health classifications. You’ll instantly see how rates change when you toggle through the four classes. Take a minute to run our quote engine to see for yourself and you will be able to visualize how these classifications dictate your premiums to the exact penny. 

 

Our Final Thoughts

Now that you are educated on the subject of life insurance health classifications, you will have a much better idea at how insurers determine your premiums. 

Contact us today and we will happily answer all your questions without any obligation. I hope you have found this blog post to be beneficial.

All the best,
Jack Venturi

Should you have any questions, please don’t hesitate to call us at 815-390-7545 for a quick response.