The cost of your life insurance policy (aka the premium amount you pay each month) is determined by a variety of factors, but one of the most influential is your underwriting classification.
Also referred to as your health class, underwriting classifications are the categories life insurance companies use to determine your health and level of risk. For traditional life insurance coverage, carriers will review your insurance application and medical exam to determine which class you fall into.
Top Factors that Determine a Life Insurance Classification
When you apply for life insurance, the insurance carrier tries to get a full picture of your health and lifestyle. These factors include:
- Height and weight
- The presence of any chronic health conditions, like heart disease, high blood pressure or high cholesterol
- Tobacco use, including smoking, vaping and/or smokeless tobacco
- Family health history, such as a history of diabetes on your mother’s side of the family
- Your lifestyle habits and hobbies, such as a hobby that is considered dangerous like rock climbing or scuba diving
- Whether your occupation is considered high-risk, including law enforcement or construction
- Your criminal history
What are the life insurance risk categories?
The life insurance risk categories, or health classifications, include:
- Preferred Plus
- Preferred
- Standard Plus (sometimes called Regular Plus)
- Standard (sometimes called Regular)
- Preferred Smoker
- Standard Smoker
- Substandard
The Seven Life Insurance Health Classifications
The following definitions can help you better understand the difference between the classes and how they can impact your life insurance policy rate.
1. Preferred Plus
Sometimes referred to as Super Preferred or Preferred Best, Preferred Plus is for those with excellent health and no family history of medical risks such as heart disease or cancer. Preferred Plus applicants tend to have the lowest life insurance premiums of any underwriting class.
2. Preferred
Individuals who qualify for the Preferred class are also in pretty good health, with the exception of something like high cholesterol or high blood pressure. Although this underwriting class doesn’t provide the absolute lowest rate, the cost of premiums are favorable compared to the following classifications.
3. Standard Plus (also called Regular Plus)
Those who qualify for the Standard Plus classification are still considered to be in good health, but might have a few minor health concerns to keep an eye on, such as high cholesterol or high blood pressure and being outside of the ideal height or weight range.
4. Standard (also called Regular)
The Standard or Regular classification—also referred to as Standard Non-Smoker—means you likely have average health and a normal life expectancy. There could be a concern around obesity or maybe your family has a history of heart disease or cancer, but you’ll likely have a higher premium than those in Standard Plus or Regular Plus and a more favorable rate compared to the Preferred Smoker rates.
5. Preferred Smoker
This is a subcategory of the Preferred class; this category is for those who would otherwise fall into the Preferred underwriting class if they didn’t smoke. If you recently quit smoking, you still may qualify for this class, but it would be worth reviewing your coverage on an annual basis, at least, if you were to stay tobacco-free.
6. Standard Smoker
Much like Preferred Smokers, the Standard Smoker classification is a subcategory of the Standard class and is for those who would otherwise fall into the Standard underwriting category if they didn’t smoke.
7. Substandard
The Substandard class is not as clear as the other six categories. It’s typically used if you have a complicated health history or have had new health problems arise recently, like a heart attack. Your coverage and rates are determined by a table rating system that provides a grade. While some of the prices of Substandard coverage are expensive, it’s still an option to ensure your loved ones are covered in the event of your death.
The table rating system is graded by either letters or numbers (A-J or 1-10), depending on the insurance company. On average, what you pay as your premium will be the Standard price plus 25% for every level down in the ratings:
- A = Standard + 25%
- B = Standard + 50%
- C = Standard + 75%
- D = Standard + 100%
- E = Standard + 125%
- F = Standard + 150%
- G = Standard + 175%
- H = Standard + 200%
- I = Standard + 225%
- J = Standard + 250%
The lower the table rating, the higher the premium. For example, if you are rated in Table G, you will pay the premium rate for a person in the Standard health class plus 200% of that premium price.
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