Life insurance terminology can make choosing a plan more confusing than it needs to be! If you’re shopping for plans you’ve probably come across the phrase Life Insurance Rating or Health Class Rating, so what does it mean and why does it matter? It’s actually pretty simple; it means the risk level of issuing you a policy based on your age, lifestyle, and family history. Life insurance ratings matter because they play a large role in determining your life insurance premium.
How Are Life Insurance Ratings Determined?
Life insurance ratings are split into a number of categories, which can vary by insurer; we’ll explain these in more detail shortly. To assess which life insurance rating you fit into you’ll be asked to fill in a questionnaire about your medical history, your family medical history, and your lifestyle. You may also have to undergo a medical exam, which includes basic tests such as heart rate, blood pressure, height, weight, and blood tests for cholesterol and major organ function.
What Are The Life Insurance Ratings?
As mentioned above these categories can vary by insurer but there will generally be four main ratings classes:
Preferred select, also known as preferred plus, is the best rating available. This rating is reserved for people who are considered the lowest risk, which means that they are in great health, maintain a healthy weight, do not participate in dangerous activities, and have no history of major family health issues like cancer or heart disease.
Preferred is still considered an excellent rating and people in the preferred class will have many of the same health and lifestyle qualities as people in the preferred select rating. However, there may be a slight health issue, or history of family health problems that prevent the person from being considered a ‘select’ candidate.
Standard plus is also a good health insurance rating. People who fall into this category are generally in good health but have combination of health issues that are considered risk factors such as being overweight and having high cholesterol.
Standard applicants have average health and a normal life expectancy. There may also be a family history of health issues that caused the premature death of a parent.
If you’re a smoker you’ll actually be rated on a different (and more expensive) scale which is used to categorize tobacco users. These categories generally include Standard Tobacco User and Standard Tobacco User Plus; the requirements are generally the same but rated for tobacco users. One important thing to consider is that each insurance company has its own definition of who is considered a tobacco user. For example, some insurers consider you a non-tobacco user if you smoke less than a certain amount of cigars per year. Compare quotes from numerous insurers to ensure that you get the best rate available.
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