Your premiums are directly related to how the life insurance underwriters classify you as a potential risk. Those in good health with good behavioral habits pose a lower risk to life insurance companies and are able to get a better rating, which lowers their overall premiums. Likewise, those who in less than good health or who have behaviors that are less than ideal are rated lower, causing a higher premium to be charged due to risk.

It’s well understood that the higher the risk you are to life insurance companies, the more you’ll pay for the privilege of coverage. Less well understood are the risk classifications used by most insurance companies to determine insurance premiums. While actuarial scientists get paid the big bucks to develop pricing models for these classifications, it’s fairly easy for the layperson to get a general idea of which group they fall into.

Here’s what you need to understand about how insurers determine your risk, and what you can do to ensure the best possible rate on life insurance.

See what companies you Qualify for

While company research is an important step to make an educated decision on which life insurance policy will be best for you, you may not qualify for your chosen company.

For this reason, we recommend that you take our Health Quiz. It asks the same questions life insurance companies ask during underwriting, and based on your answers, we will filter down results to show just those that you qualify for.

Insurance companies typically require applicants to take medical exams in order to determine the risk factors involved in classification. Additionally, they’ll request your medical records to establish your risks and any associated with your family medical history.

The Six Most Common Standardized Classifications

Insurance companies typically classify applicants based on their health and other risk factors. Each insurer’s classification system is different, so expect the criteria to differ. That said, typically insurers offer these six classifications:

• Preferred plus
• Preferred
• Standard plus
• Standard
• Preferred smoker
• Standard smoker

Note that it’s not unusual for applicants to fall outside of these standard classifications—they may instead be eligible for what are called table ratings (see below).

1. Preferred Plus: Elite classification–also called preferred elite, preferred select, or super preferred.

This classification is highly selective—only approximately 5 percent of the overall population is considered qualified. As such, it’s reserved for those with a relatively spotless health history. That means normal BMI, blood pressure and cholesterol, no regular medication, no smoking, and a fairly spotless family medical history. Medical histories that might raise red flags for insurers might be parents or siblings who died of cancer or heart disease before 60.

Note also that clean driving records are considered. Applicants will be excluded if they’ve had their license suspended, had more than two accidents or moving violations in the past three years, or have been convicted of a DWI in the last five years.

2. Preferred: for those with a good—not perfect—bills of health.

A slight step down from preferred plus, this classification is often reserved for those in overall great health but have a handful of health conditions well treated by medication. They may also have slightly higher cholesterol, BMI, or
blood pressure.

Those who partake in a relatively dangerous job or activity can also be put in this classification. Activities and jobs with higher rates of accident-related deaths like roofing, logging, rock climbing, skydiving, and others, are
considered high-risk. See our guide for a deeper dive into high-risk activities and their impact on life insurance coverage.

3. Standard plus: above average health with acute health conditions.

Those who qualify for standard plus are in overall above-average health and have a little family history of disease, but suffer from minor health issues or maybe over height and weight guidelines.

4. Standard: average health—most popular classification.

The most commonly classified category. Standard qualified policyholders are of average health, take more than one medication, and have a family history including diseases like heart disease, high cholesterol, and cancer.

5. Preferred smoker: preferred health classification for infrequent smokers.

This categorization is generally reserved for those who might otherwise qualified for preferred classification, but are smokers—generally occasional smokers—and those who may have recently quit.

6. Standard smoker: frequent smokers in average health.

Reserved for regular smokers who are in average health.

What Are Table Ratings?

As you might have noticed, even the “lowest” life insurance classification still requires the insured to have average health, which leaves out a wide swath of applicants with chronic health issues. If you fall outside these parameters, however, you are still very likely qualified for life insurance—albeit at rates above those for “standard” classification.

The many who fall below these health requirements are often given what’s called a table rating, often ordered in numerical or alphabetical groups in descending order of health risk, like 1,2,3, or A, B, C. Life insurers typically charge these applicants the same rate as the standard classification with an additional 25 percent of the standard rate added for each step down the table rate ladder.

For instance, the table rates of an insurer may look like this:
– Standard rate + (an additional) 25 percent = Table rate A
– Standard rate + 50 percent = Table rate B
– Standard rate + 75 percent = Table rate C

How Health Conditions Affect Life Insurance Classification

Despite the rigorous-appearing qualifying factors for classification, the actual evaluation gives applicants more leeway than one might expect. In the following ten costliest health conditions for life insurance classifications—according to Stephen Bloom, former New York Life chief underwriter and MetLife VP Dr. Jacki Goldstein—it’s still possible to get a premium rating.

High Blood Pressure

Insurers are often especially flexible with applicants who make an effort to manage their high blood pressure. Many may still qualify for preferred classification if the condition is under control and medicated.

Type 2 Diabetes

Adult-onset diabetes often leads to serious conditions like coronary disease and renal failure, but the later in life the diagnosis and the higher the quality of management, the more favorably applicants can expect to be rated.

Sleep Apnea or Narcolepsy

Often insurers are wary of applicants with sleep apnea or narcolepsy—for fear of its association with fatal accidents and heart disease (in the case of sleep apnea). Like high blood pressure, well-managed cases can be rated favorably.

Heart Disease

Heart disease dramatically increases the risk of heart attacks, which are typically unpredictable and fatal. Family history plays a big part in classification—the better the outcomes of relatives with heart disease, the
more favorable the consideration.

Asthma

While asthma is rarely fatal in the vast majority of cases—in fact, well-managed sufferers often qualify for a premium rate—insurers consider poorly managed and/or severe asthma a serious risk factor.

Cancer

Again, the seriousness of the condition is the most significant factor considered by insurers—some still qualify for preferred classification. In addition, a policy may be delayed for six months to a year to establish the seriousness of the cancer—for those recently diagnosed.

Weight Conditions

Obese applicants and anorexia suffered are closely scrutinized by insurers. More favorable classifications can be made for those with lower BMIs and those whose anorexia is inactive.

Organ Transplants

Insurers typically see organ transplant patients as high risk, due to the often life-threatening conditions that make them necessary. Corneal and kidney transplants are usually underwritten more positively, but transplants of the
heart and liver are looked upon more seriously.

Autoimmune Disorders

Those with disorders like rheumatoid arthritis, lupus, or multiple sclerosis can still get life insurance. Insurers want to know that the condition has been well controlled for more than a year.

Depression

Suicide is the main concern for those with depression, but the wide spectrum of symptoms and experiences for those with the disease means sufferers vary from preferred to uninsurable.

High Cholesterol

This fairly common condition is often treated much like high blood pressure—applicants may be preferred or outright denied depending upon the severity and the quality of management.

What Can I Do To Improve My Health Rating?

One of the most advantageous perks of life insurance classifications: insurers can’t move you down a classification even if you start smoking, develop cancer and gain 50 pounds. It isn’t necessarily easy to move up a class, so to speak, as many of the most heavily weighted factors, like medical history, height, and pre-existing medical conditions, are fairly out of your control. That is, in the short term.

However, there are several rating factors that are relatively variable, including:

• Smoking habits
• Cholesterol
• Blood pressure
• Driving record
• High-risk activities
• Alcohol and drug abuse

Time is also a useful variable here. Firstrust Financial Resources CEO Adam Sherman recommends policyholders check to see if they qualify for a lower rate class every two years (the conditions of which should be outlined in your policy term).

In the worst-case scenario, if you’re denied coverage then time can help as well. If insurers discover you’ve had a recent cardiac episode, for instance, you can apply again when your condition is thought to be stabilized. If all else fails—and you’re either dissatisfied with your quote or get denied outright—shopping around is highly recommended, as insurance industry competition can net you better rates and higher classifications.

True Blue Recommends

If you are uncertain how you will be classified in regards to your health rating, it is best to work with an independent agent who can shop multiple companies to get you the best coverage for the best price at the best rating. In the event you are required to be table rated, it is recommended that you improve (when possible) the circumstances surrounding your rating and work with an agent or underwriter to get a better health rating.