What Are Life Insurance Risk Classifications?

How Risky Are You?

Along with advances in healthcare, insurance companies have changed the way they evaluate risk in applicants. For example, conditions like high blood pressure, acid reflux, high cholesterol, sleep apnea, and others used to be considered high risk conditions. Family history and genetic risks are taking on a bigger role. And insurance premiums reflected that risk assessment. Today, medications make these conditions much more manageable. Risk assessment has decreased and thus premiums are cheaper.

Insurance companies have different risk profiles; different companies assess health risks differently. If you have a health issue, you need to buy insurance from the company best suited to your particular health status. Talking to an experienced insurance agent is critical if you have any health issue.

What Is A Super Preferred, Preferred and Standard Risk?

Twenty years ago there were two categories of risk: Smoker and Non-smoker. Today, things are much more complicated. Most insurance companies have six general categories of risk:

Super Preferred No Nicotine (also called Preferred Plus)
Preferred No Nicotine
Standard No Nicotine
Preferred Nicotine
Standard Nicotine
Substandard

Life insurance companies are becoming more interested in an insured’s genetic makeup. At some point in our lives, we blame our parents for how we turned out. Your genetic makeup is something you can stick on them. Underwriters many times assume that if a family member has it, you’re probably going to get it.

Family history relates to “immediate family members.” That means your father, mother and any brothers or sisters. They especially look at problems occurring with a family member prior to the age of 60. If the family member experienced the problem after 60, you’re probably in the clear.

The primary attention is focused on cardiac, cancer and diabetes (to a lesser degree) family histories. This is where it pays to talk with an experienced agent because it can bump you up or down as many as two spots on the underwriting guidelines chart.

Obviously, Super Preferred applicants will get the best (least expensive) rates. In our experience, only about 25 percent of applicants will qualify for the Super Preferred rate, about 60 percent for Preferred, and the remainder fall into one of the Standard categories.

Life insurance underwriting is not an exact science; different companies may quote different rates for the exact same person based on company risk standards. The two tables below provide very general guidelines for Preferred and Standard categories. The first is based on health, family, driving, alcohol, vocational and other risk factors. The second is based on weight-to-height ratios. Again, these are guidelines only. After filling out our Instant Life Insurance Quote form, if you have questions about your risk factors and rate category, feel free to email or call us. We can shop your personal health status to several companies known for insuring those who have specific conditions. Our goal is to educate you, before picking a plan.

Here are some very general guidelines. Don’t use these as gospel as underwriting guidelines are a moving target. It depends on a lot of factors. Occasionally, we find applicants that meet the requirements below but when combined with other factors get a lower health category. There are several factors not listed below and can negatively affect your situation. Although I’ve covered this in a previous section, it’s important to talk with an experienced licensed agent in your state.

Tobacco usage is one of the trickier areas as different types of tobacco will trigger different ratings. Cigar, pipe smokers and chewers can get non-smoker rates depending on the carrier. Marijuana, although legal in some states, draws scrutiny, depending on usage.

If you see an “(*)” in any column, that means there are exceptions to the general rule – please call for specific details.