Senior Term Life Insurance Rates – Your life insurance classification determines the rates you will pay for your life insurance policy. After you apply for a policy, the insurance company will review all your materials at underwriting and then assign you a risk class based on your health, construction, family health history, hobbies, and occupation.
Life insurance companies generally use six health classifications to determine your premiums. However, each company assigns those classifications differently, which is why it’s so important to compare insurance quotes to find your best rate.
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Also called Preferred Elite, Super Preferred, or Preferred Select, the Preferred Plus classification comes with the lowest life insurance premiums. Applicants assigned Preferred Plus have a height-to-weight ratio within the Preferred-Plus range on that insurance company’s build table. Typically, people with a BMI (Body Mass Index) of 18 to 29 fall into this range. (People with a BMI of less than 18 won’t be assigned a class based on a build table, but will have their height-to-weight ratio evaluated at underwriting along with the rest of their information.) People rated Preferred Plus may have one or two. No deaths from heart disease or cancer in their immediate family with well-controlled or resolved minor health problems.
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The preferred rating class, also called non-tobacco/non-smoker preferred, has the second lowest premiums. Applicants assigned a preference rating class have a height-to-weight ratio within the company’s preference range (typically, people with a BMI of 30 or 31 fall within this range). They may have one or two well-controlled or resolved minor health problems and no death from heart disease or cancer in their immediate family (some carriers allow one death from these conditions in your immediate family).
The Standard Plus rating class has the third lowest premium. Applicants rated Standard Plus have a height-to-weight ratio within the company’s Standard Plus range (typically, people with a BMI of 32 or 33 fall into this range). They may have mild to moderate health conditions that are well controlled or resolved. You usually get a Standard Plus rating if you have a death in your immediate family from heart disease or cancer.
The standard classification, also known as non-tobacco/non-smoker standard, comes with the fourth lowest premiums. Applicants receiving standard rates have a height-to-weight ratio that falls within the company’s standard range (most people with a BMI between 34 and 38 fall within this range). They may have well-controlled or resolved moderate health conditions, chronic health conditions, mental health conditions such as mild depression or anxiety, or may be years away from more serious health events. People are often rated as normal if more than one close family member has died from heart disease or cancer.
There are certain details in your application that could result in a standard rating even if you have no other health problems. These include having quit smoking a year or two ago, recovering from certain substances, and having a non-violent felony (parole evasion) on your record.
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Table ratings (Table 2, Table 3, etc.) are given to applicants with more serious health conditions or a height-to-weight ratio that falls within the company’s table-rated range (which includes most people with a BMI between 41 and 48. Range). Among the table ratings, Table 1 (sometimes called Table A) has the lowest premiums and Table 10 (sometimes called Table J) has the highest.
Premiums for table ratings are set in relation to insurer rates for a standard risk class. Rates for table ratings are generally calculated by adding 25% to the standard rate for each level below the table. (Table 1 is at the top of the list and Table 10 is at the bottom.)
Applicants who currently use tobacco or nicotine products or have in the past 12 months receive a tobacco or smoking rating. People who use tobacco or nicotine generally fall into three categories: preferred tobacco/smoker, regular tobacco/smoker, and tobacco/smoker list ratings. On average, premium costs for these ratings are up to three times higher than their non-tobacco equivalents.
Tobacco/smoking classifications are assigned using non-smoking/non-smoking preference and standard ratings, but they also take into account nicotine or tobacco use frequency. For tobacco or nicotine users, premiums for table ratings are generally calculated using the standard tobacco/smoker rate, and 25% is added for each level in the table.
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Insurance companies look at a wide range of health and lifestyle factors during underwriting to set your classification. Each insurance company has its own criteria for determining how much each of these factors affects your rating. Insurers also allow some flexibility in assigning classifications by looking at your entire application to assess your risk. Different approaches to setting up classifications mean you’ll likely see different quotes from company to company (which is one reason why buying multiple quotes for life insurance is essential).
Your health plays a big role in your life insurance classification. The insurance company will look at information from your medical exam (unless you qualify for accelerated underwriting), your answers about pre-existing or current medical conditions, and your prescription history. In some cases, the insurance company may also request an attending physician’s statement (APS) from your doctor to learn more about your health history.
Each life insurance company has its own build table that places you in a health classification based on height-to-weight ratios, similar to the BMI (Body Mass Index) measurement. Insurance companies also consider your weight history, so sudden or short-term weight changes may affect your rates, but changes that last a year or more can affect them more.
Life insurance companies see tobacco use as such a risk that they have created a special category for applicants who smoke, and those rates can be up to three times higher than non-smokers. Smoking, using chewing tobacco, or vaping can all increase your rate significantly — even if you do it occasionally. If it’s been a year or more since you quit, you’ll qualify for non-smoking rates. Each insurer’s requirements are different, but generally, insurance companies want your last cigarette five years ago before they’ll consider you for Preferred Plus rates.
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Occasional drinking won’t affect your premiums, but being a problem drinker will. Also, you may be sober from alcohol if you have recently recovered or been in a program or rehab. Many major insurers offer non-smoking classifications for marijuana users, depending on how often you smoke. If you haven’t been in recovery for years, using hard drugs can lead to immediate decline.
When you apply for life insurance, you will be asked to disclose whether a parent or sibling has been diagnosed with, treated for, or died of heart disease, cancer, diabetes, kidney disease, or some other hereditary disease. This family health history can result in a lower life insurance rating class, especially if a parent has died of heart disease or cancer.
It’s a catch-all category that assesses how dangerous your lifestyle is based on details like your driving record, dangerous hobbies, and your occupation.
Multiple moving violations will lead to a lower life insurance risk classification and higher rates, and DWIs within the past five years will cause the application to be denied. If you have a dangerous hobby (like scuba diving), the insurer will want to know more details (how deep you dive). If you have a dangerous job (like in the fishing or mining industries), you need to share more about your daily tasks.
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If the insurer thinks this hobby or occupation poses a high risk, they may add a flat additional fee to your policy, which can be an additional $2 to $5 in premium for every $1,000 of coverage you have. (That’s an extra $5,000 a year on a $1 million life insurance policy.)
Some life insurance companies may offer you an exclusion rider, which means your policy won’t pay out if your death is caused by a specific act, but these are rare.
If you have a criminal record, most insurance companies want you to be on parole for a year before they will issue you a policy. If you have a felony on your record, standard may be the best rates you can get, even without any health issues, although table ratings are also a possibility.
How life insurance classifications affect your rates Term life insurance rates for a 30-year term policy for a 35-year-old woman
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Methodology: Average sample monthly estimated rates for 35-year-old female smokers and nonsmokers purchasing Preferred Plus, Preferred, Standard Plus, Standard, Preferred Smoking, and Standard Smoker Health Rating for 30 years, $250,000. $500,000, or a $1 million term life insurance policy. Based on a combination of policies from Corbridge Financial, Legal & General America, Brighthouse, Lincoln, Mutual of Omaha, Pacific Life, Protective, Prudential and Transamerica, life insurance averages vary by insurer, term and coverage amount. Health Class, State. Not all policies are available in all states. Fare illustration valid till 10/3/2022.
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