Life Insurance Risk Classes

What is a “Risk Class” in life insurance?

A “Risk Class” is a simple designation on “how you rate” with a particular insurance company, based on your health. The higher your rating, the lower your insurance premium charge will ultimately be.

Two Major Categories

There are two major categories under which you will be rated (risk “classified”).

  1. Non-Smoker
  2. Smoker

Non-Smoker – Sounds simple enough. If you smoke, you’re NOT a “non-smoker.” Non-smokers have the opportunity for a life insurance company’s highest ratings (cheapest premiums), typically Preferred Plus and Preferred. Based on other factors (particularly health-related), your rating can vary somewhat. Being a non-smoker doesn’t mean you cannot be rated low if you’re of poor health, though.

       Ratings For Non-Smokers (Highest to Lowest)

  • Preferred Plus
  • Preferred
  • Standard Plus (also “Super Standard”)
  • Standard
  • Substandard (also called “Table Rated”)
  • Uninsurable (insurance cannot be bought any price)

So, although non-smokers are open to earning the highest available rating of Preferred Plus, depending on an individual’s health, they may be “Uninsurable” and outright denied coverage.

Smoker – Being a smoker automatically takes you out of the running for a typical insurance company’s highest rated classes of Preferred Plus and Preferred. Smokers in otherwise excellent health can qualify for a Preferred Smoker class (highest risk class for a smoker), which can end up with a lower premium than a Non-Smoker Standard person.

       Ratings For Smokers

  • Preferred Smoker
  • Standard Plus Smoker
  • Standard Smoker
  • Substandard Smoker (also called “Table Rated”)
  • Uninsurable (insurance cannot be bought at any price)

What are “Table Ratings?”

Table Ratings are insurance risk class ratings that rate below “Standard” but where an insurance company is still willing to issue a policy on an individual.

After all, almost everyone has their price, and insurance companies are in the business of evaluating and taking risks, provided their compensation is suitable to them.

Examples of cases where we’ve seen Table Ratings

  • Uncontrolled High Blood Pressure
  • Diabetes (Type 2 possibly, Type 1 definitely)
  • Obesity
  • Past History of Cancer
  • Sleep Apnea
  • Other Diseases

Keep in mind, not every company rates their policyholders the same way. Where one company may table rate an applicant, another may give them a standard rating, while yet another may outright deny coverage.

Don’t just apply willy-nilly with any company!!

Let RMY Insurance shop your case to a multitude of companies to get you your best possible rating and price!