Life Insurance Risk Classifications Explained

When looking into a life insurance policy, it is often difficult to know precisely the premiums you will pay until your policy goes through the underwriting process. 

During the life insurance underwriting process, you will eventually be given an insurance risk classification that will determine the actual cost of your policy.

How do the life insurance underwriting risk classifications work?

Life insurance rate classes are part of every insurance company’s life insurance underwriting process.

Your risk classification in insurance and the eventual premiums you pay for coverage will ultimately depend on the details of your overall health.

Remember that many agents give quotations based on the best insurance rate class without asking you enough health questions to win your business.

However, the insurance rate class you get at the end of the application process is what matters!

Life Insurance Health Classifications

Here are the common names associated with the rate classes available in the life insurance industry. 

life insurance table rating chart

*We are only showing  A, B, C, and D in this table rating chart

We have also provided helpful descriptions of each underwriting risk classification.

Hopefully, these general life insurance underwriting classifications will help clarify where you fit into the life insurance health classes.

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The preferred plus life insurance requirements

• An applicant who receives a preferred risk classification will pay the lowest premiums. It would help if you had excellent overall health to qualify.
• You are free of any tobacco for 3-5 years.
• You do not engage in risky occupations or hobbies like scuba diving or aviation.
• You have no history of drug or alcohol abuse.
• You must also have no history of heart disease (sometimes cancer) among your parents or siblings before the age of 60

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Preferred risk Life Insurance Rate Class

• Applicants that receive preferred life insurance rates generally have excellent overall health and do not participate in dangerous activities.
• Medications like blood pressure, and cholesterol, are allowed, and family history guidelines are slightly more lenient with the preferred risk category.

Standard Plus Life Insurance Rate Class

• The standard plus insurance risk class is associated with optimum health, but you may have minor health issues.
• You may be slightly over the life insurance height and weight chart, but you also have no family history of diseases.

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Standard risk Insurance Rate Class

• The standard risk insurance rate class generally applies to those with average overall health.
• You are taking multiple medications.
• You do not fit within the published life insurance height and weight chart
• You also have a family history of cancer or other diseases

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 substandard risk category

• Another substandard risk classification name is impaired risk or table-rated life insurance.
• The substandard risk class refers to people who have significant health impairments.
• Depending on their risks, these individuals may have to pay an extra fee or “table rating” to the issuing life insurance company.

These insurance risk classes are general guidelines, and many insurance companies have different rules to qualify for each rate class.

If you participate in a hazardous occupation or risky hobbies like sky diving or scuba diving, you must disclose them to your agent.

Many agents may forget to ask you or fail to realize that these endeavors can bump you into a substandard risk class.

This is why it is essential to work with an experienced agent familiar with the underwriting classes of many companies.

This will allow you to be matched with a company specializing in your type of risk at the best possible price.