When your life insurance application is approved, the insurance company will assign you a risk category based on your health and lifestyle.
The category is significant since it, combined with your age, determines the cost of life insurance. The healthiest people with the safest habits are thought to be the least risky, thus they are assigned to the category with the lowest rates.
There are several main “rating classes” among the leading life insurance firms. The names of the firms differ. “Elite plus,” “elite,” and “preferred” are among MetLife’s best rating classes. “Preferred plus,” “preferred,” and “standard plus” are AIG’s top three.
Despite the fact that the actual names vary from one manufacturer to the next, you may expect to see the following broad categories:
Preferred Best Non-Smoker: Applicants in good health who haven’t smoked in at least five years may be placed in this category and receive the best available rates. You’ll need a healthy weight, blood pressure, and cholesterol levels, as well as a clean medical history. A parent or sibling cannot die of heart disease or cancer before they reach the age of 60. Your driving record is also taken into consideration. If you’ve got a DUI conviction within the last five years, you’re unlikely to make it into the top class. If your license has been suspended or you have had more than two moving offenses or accidents in the last three years, you will be disqualified.
Preferred Non-Smoker: The second-best category is equally linked to good health, albeit blood pressure, cholesterol, and weight are given a little more latitude. A parent or sibling dying of illness or heart disease before their time is usually not acceptable. To be eligible for these low prices, you don’t have to appear like a fitness model. To qualify for “preferred” rates with AIG, for example, a 5-foot-10-inch male can weigh 129 to 210 pounds and a 5-foot-5-inch woman can weigh 102 to 178 pounds.
Nonsmokers who are typically in good health but don’t quite fit into the desired category are placed in this category. Treatment for high blood pressure, for example, may be appropriate as long as readings are within normal limits.
The average person falls into this category of nonsmokers. Obesity or being treated for high blood pressure may be acceptable, as may the loss of one parent or sibling from heart disease or cancer before the age of 60.
Preferred Smoker: Smokers who would otherwise be eligible for preferred rates are placed in this group. Even if you have recently stopped smoking, you may still be subjected to smoker rates. To qualify for the greatest nonsmoking rates, you must be a nonsmoker for at least five years, three years for the second-best prices, and one year for regular nonsmoker rates.
Standard Smoker: This group is for smokers who would otherwise be classified as nonsmokers.
You will most likely qualify for standard rates if you are an average individual with a normal life expectancy.
Because of health issues like as diabetes, some persons may not qualify for standard rates, but they will still be covered. The insurance provider assigns a “table rating” in such instances. Some businesses use numerals like 1, 2, and 3, while others use letters like A, B, and C. The standard rate is often increased by 25% for each higher table rating. As a result, a table grade of C denotes a standard rate + 75%.
An insurance may impose a temporary surcharge known as a “flat extra” on occasion. For example, a cancer survivor may be eligible for ordinary rates plus a $5 flat fee every $1,000 of coverage for five years. For the first five years of a $500,000 policy, this would represent an extra $2,500 each year in addition to the usual rate.
Some factors, including as your family’s medical history, are beyond your control, but you can make other adjustments to minimize your life insurance prices.
You’ll get the most protection value if you quit smoking. Smokers pay 2-3x as much for life insurance than non-smokers. To qualify for non-smoker pricing at most companies, you must have been tobacco-free for at least a year.
If you’re overweight or obese, losing weight can help you qualify for better rates, as well as improve your blood pressure and cholesterol levels, which will result in lower rates.
Because life insurance premiums vary greatly from company to company, it is vital to compare rates (ProtectQuote).
