Understanding Life Insurance Ratings

Life insurance is one of the most important investments you can make for your future. It offers the peace of mind that comes with knowing your loved ones will be taken care of in the event of your unexpected demise. However, finding the right life insurance policy can be challenging, especially when it comes to choosing the right rating class. In this article, we’ll explore life insurance ratings, how they are determined, and what you need to know to choose the right one for your needs.

What is a Life Insurance Rating?

A life insurance rating is a classification given to an individual by an insurance company based on their health, age, and lifestyle habits. The rating system determines the premium, or the amount you pay for insurance coverage, based on the level of risk you pose to the insurer. The higher the risk, the higher the premium.

Life insurance rating classes can vary between insurance companies, but typically they range from Preferred Plus to Standard or Substandard. Preferred Plus is the highest rating class, reserved for individuals who are in excellent health and have no history of medical issues. Standard or Substandard ratings are given to individuals who have health or lifestyle issues that increase their risk of death, such as smoking or a history of chronic illness or disease.

What Factors Affect Your Life Insurance Rating?

There are several factors that can impact your life insurance rating, including:

Understanding the Rating Classes

As we mentioned earlier, life insurance rating classes can vary between insurance companies, but here is a general breakdown of the most common classes:

Preferred Plus

Preferred Plus is the highest life insurance rating class, and it is typically reserved for individuals who are in excellent health, have no family history of disease or chronic illness and don’t engage in high-risk activities like smoking, skydiving, or racing cars.

Preferred

Preferred rating class is given to individuals who are in good health and have a family history of disease, but do not have any significant medical issues themselves.

Standard

Standard rating class is given to individuals who have an average level of risk, based on their age, health, and lifestyle habits.

Substandard

Substandard rating class is given to individuals who have a higher level of risk than the average person, due to pre-existing conditions, lifestyle habits or occupation. The substandard rating class may be further divided into categories such as Table 1, Table 2, etc.

Frequently Asked Questions About Life Insurance Ratings

Can I improve my life insurance rating?

Yes, there are several steps you can take to improve your life insurance rating. For example, you can quit smoking, lose weight, or improve your overall health. It’s also important to disclose all of your medical history, even if it is embarrassing or uncomfortable, as failing to do so could result in a higher premium.

Do I have to take a medical exam to get a life insurance rating?

It depends on the type of insurance policy you choose. Some policies, like term life insurance, require a medical exam before you can receive a rating. Other policies, like guaranteed issue life insurance, do not require a medical exam, but they may have higher premiums.

Can I change my life insurance rating after I’ve been approved for coverage?

If your health or lifestyle habits improve significantly, you may be able to request a new life insurance rating from your provider. However, this is not always guaranteed, and in some cases, you may need to take out a new policy with a new rating class.

Are there any other factors that impact my life insurance premium?

Yes, in addition to your life insurance rating, other factors that can impact your premium include the length of the policy, the amount of coverage you need, and the type of policy you choose.

Conclusion

Understanding life insurance ratings is an essential part of finding the right policy for your needs. By considering your age, health, lifestyle habits, and occupation, you can determine which rating class you are likely to fall into, and how much you can expect to pay for coverage. By taking steps to improve your health and overall lifestyle, you can improve your rating and potentially save money on your premiums over the life of your policy.