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Risk Classifications in Life Insurance Policies

Risk Classifications in Life Insurance Policies

May 29, 2019

A risk class is assigned to a life insurance applicant to determine their risk level to insure and their premium amount. A risk class is determined by reviewing all the risk factors that pertain to that individual and analyzing how they interact to affect one’s overall health. Your medical records, smoking status, height/weight, gender, family history, and age are a few of the factors that are taken into consideration when determining risk class. If you are applying for life insurance, but aren’t sure of your risk class, here is a brief overview of the most common classifications:

  • Preferred Plus— Optimal health. This risk class has the lowest possible premium payment. Individuals in this category have no chronic illnesses, a healthy height/weight ratio, and lab results within a normal range. They have no immediate family members who have died of cancer or heart disease before the age of 60.
  • Preferred—Excellent health. Height/weight may be a little bit outside of the ideal range. Blood pressure and cholesterol are well-controlled, though individuals may be treated for high blood pressure or high cholesterol.
  • Preferred Smoker—This class has the same characteristics as preferred, but with tobacco use in the last year.
  • Standard Plus—Above average health. Height/weight may be a little bit outside of the ideal range or may be treated for a minor medical issue. 
  • Standard—Average health. This class comprises those with a normal life expectancy. They may be treated for minor conditions and have slightly higher than normal blood pressure or cholesterol that isn't controlled with medication. If one or both parents died from heart disease or cancer before the age of 60, underwriters will potentially give a standard risk class.
  • Standard Smoker—This class has the same characteristics as standard, coupled with the use of tobacco products in the last year.
  • Substandard—Below average health. This class comprises those with below average life expectancy and includes those who are being treated for major health conditions such as heart attack, cancer, or diabetes.

Although we have little control over some of the factors that contribute to risk class—such as family history and age—things like receiving treatment for blood pressure and refraining from smoking may help to place you in a lower risk class.

Risk factors can also sometimes be lowered once the policy is in force—some insurance companies offer incentives for healthy behavior. You can improve your health by losing weight, lowering cholesterol and blood pressure, or quitting smoking, and then apply for a better class a year or two later. There are even some companies that give policyholders the opportunity to report habits regarding their eating, drinking, and exercise to receive discounts on premiums and other benefits.

Contact us today for a more specialized overview of your risk factors or how you can lower your rates. If you want to see how different risk classes can affect your life insurance policy, try our instant quote tool

This blog post was originally posted on our dedicated insurance site, 1752 Insurance.