When you apply for life insurance, insurance companies use a rating system to assess the applicants risk level. The assessment will be used to determine where a applicant will fall in to the rating system. Sometimes, higher risk applicants will fall in to a table rating which can often times be associated with higher premiums.
In this installment of Life Insurance Thursday, we will fill you in on everything you need to know about life insurance ratings.
- You will most likely need a medical exam and following that your insurer will review your test results.
- They will also look at your family health history and lifestyle choices.
- If you are a smoker, you most likely fall into a classification as a preferred smoker or standard smoker.
- When it comes to term life insurance policies, many applicants will fall into categories such as preferred select, preferred, standard plus and standard.
Explanation of the basic categories:
- Preferred is associated with applicants in excellent health.
- Standard Plus is associated with applicants that have optimum health with a few minor issues.
- Standard is associated with average health and a normal life expectancy.
- Preferred Smoker may be someone that falls into the other categories but they also smoke.
- Standard Smoker is a smoker that is of standard health.
If an applicant does not fall into a basic category:
- This means that an applicant has health issues that do not allow them to fall into a normal classification.
- Further classification is called the table rating scale.
- The applicant is given a table rating number and based on that number they fall into a category on the table rating.
- Depending on the rating, the applicant will pay an additional percentage if approved for life insurance.