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Life Insurance Rate Categories

Once you have finished your application, you enter an underwriting process in which the person writing your policy for the carrier will decide what risk category you get placed in. This is based on your overall health and lifestyle.

The category you get placed into is extremely important because it determines how much you pay for your life insurance. So, exactly how do you get the lowest rate possible? Being healthy and having a “safe” lifestyle is considered least risky for a life insurance company. The underwriting guidelines are different for each carrier. Most insurers have the same main rating classes even though the underwriting guidelines are different, but their rating class names could vary with each company. Though, as an example, with Prudential, some of their rates are called “preferred plus,” “preferred,” or “standard plus.” Whereas with MetLife, their ratings are, “elite plus,” “elite,” or “preferred.”

Life Insurance Rate Categories for Each Carrier

• Super preferred (nonsmoker): People who are in excellent health and typically those who have not smoked in the past five years might end up with this category. What you’ll need: normal weight for height, normal blood pressure and cholesterol readings, and most importantly, a clean medical history. Generally, there shouldn’t be any death due to heart disease or cancer before the age of 60 in your family history. Another thing that counts – your driving record! If you’ve had a DUI conviction within the last five years, you won’t be able to make it into this category. Same goes with your license being suspended or if you have had three or more moving violations/accidents within three years.

• Preferred (nonsmoker): This is the second best category to fall into. Although you get more flexibility with your health records than you do in the super preferred nonsmoker, or preferred plus, rating, this category is also associated with having excellent health. An early death in the family from cancer or heart disease is not generally accepted in this case either. High blood pressure treatment is generally acceptable, so long as they are within normal.

• Standard plus (nonsmoker): This nonsmoker category is for people who are in good health but did not quite make it into the preferred categories. A couple companies in this category will give you this rating if you smoke cigars, e-cigarettes, nicotine patch or chewing tobacco but not for people who smoke cigarettes.

• Standard (nonsmoker): For life insurance, the ‘average person’ will typically fall into this rating. Things such as being overweight and having treatment for high blood pressure may be acceptable as well as having a death in the family history due to cancer or heart disease.

• Preferred (smoker): This is for people who smoke who would otherwise qualify for preferred nonsmoker rates. If you recently quit smoking, you might still get smoker ratings. For a lot of life insurance companies, you MUST have stopped smoking for a minimum of 12 months for the nonsmoking rates but for most insurance companies to receive the best rating (Preferred Plus) you must have stopped smoking for 5 years.

• Standard (smoker): Smokers who would otherwise fall into the standard nonsmoker rating. Again, same as above.

So, how do you get better life insurance rates?

If you are a current smoker, or have recently quit smoking, it’s really good for yourself and in your best interest to buy life insurance now and not wait because what if you died tomorrow with no life insurance your family most likely will need the money. Most financial advisors agree, if you still smoke or just quit smoking to lower the term to 10 years even though you might need a 30 year policy. After you are quit smoking for a year you can always reapply for a non-smoking rate and lower your price or get a longer term.

If you’re overweight/obese, losing weight definitely helps! Lowering your blood pressure and/or cholesterol readings will help you find better rates.

Most importantly, it’s crucial to shop the life insurance market! Finding a good agent that shops every company, such as the agents here at 1st Option Insurance, will help you find an A or higher rated company at a great rate. With shopping the market, you will find that each company has its own guidelines for underwriting and most times, if you aren’t suited with one company, you’re better off with another.

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Life Insurance Terms You Should Know picture

Life insurance can be a complicated thing if you don’t know what you’re talking about. The industry has terminology that they have been using for years upon years. This confusing terminology has often times prevented many people from making decisions about getting life insurance.

What’s shocking is that most people who purchase life insurance policies have no idea what they bought. And most times, if they don’t understand what they bought, they might not have got the proper coverage.

So, here’s a way to help you understand a little bit more about the life insurance world and it’s terminology:

Life Insurance Terms You Should Know:

  1. Term Life Insurance

    This kind of policy lasts for only a specific number of years. You have the ability to choose from 10, 20, 25 or 30 years of coverage.

  2. Permanent Life Insurance

    This kind of policy lasts for the span of your entire life and it also factors in cash value. Whole life or Universal life is a type of permanent life insurance.

  3. Policy Owner

    This is the person who buys your policy and also has control of it. This person may or may not be the one who is insured on the policy. Example – a husband could own a policy on his wife. The policy owner is the only person who can change the beneficiary and get policy details from the insurer.

  4. Insured Person

    Kind of self-explanatory, the person whose life is getting insured.

  5. Premium

    Amount of money you pay for insurance. Typically, you get quoted per month or annually, as these are the two most popular options.

  6. Beneficiary

    On your policy, this will be the person who receives the life insurance payout. You may have more than one beneficiary, but by doing so, you will need to split up the percentages to equal 100%. Example: Naming your spouse and child as beneficiaries – your spouse would get 50% and your child would receive the other half.

  7. Death Benefit

    Life insurance money which is paid to the beneficiary.

  8. Accelerated Death Benefit

    As mentioned above, this policy feature lets you receive some of the life insurance payout early if you are terminally ill. Some insurers will often times call this a “living benefit.” It is typically a free feature on your policy, so make sure it has it!

  9. Cash Value

    If you purchase permanent life insurance, a part of your payment goes into what’s called a “cash value” account. This account grows in value over time. You could take a loan against the cash value and use the money for whatever you want.

  10. Underwriting

    This process happens once you send your application (and most times, medical exam) in to the company you’ve applied for life insurance with. During this time, the insurance company will evaluate the risk of insuring you and will determine your life insurance rate. During this process, the underwriter of your policy may or may not ask you questions regarding your medical records, prescription history and driving record.


It’s always important to be educated in everything you decide to do. Especially when making such crucial decisions such as buying a life insurance policy. Hopefully these terms will help you understand the life insurance industry some more and you can take these with you going into the process of buying a policy! If you’re still confused, don’t worry: your agent here at 1st Option Insurance will be more than happy to assist you with all of your questions. Don’t hesitate to ask. We’re here for you.

Ena Kalkan is a staff writer at 1st Option Insurance for Insurance News, a personal finance website. The source for life insurance

By on | Posted in: Life Insurance Basics

6 Myths about life insurance picture

It’s a subject no one really wants to think about. But if someone depends on you financially, it’s one you cannot avoid. A lot of misconceptions surrounding the purchase process for life insurance. We live in an age where technology is king and where generations are growing up relying more on computers than on personal interaction; how does this change the role of the traditional life insurance agent?
For years people were used to dealing with insurance agents face to face in their home; that is still the way that many older people feel more comfortable doing business. But as we see older generations disappear the expectations of people buying insurance are changing. Most people today want to shop online and not be bothered by an agent coming to your house. Online tools make it much easier to research and purchase a policy. You can get a customized quote from 1st Option Insurance life insurance comparison tool.
Below are the most 6 common myths about life insurance along with some facts.

Myth 1: If you are a stay-at-home parent you don’t need it.

Stay-at-home spouses have a special need for life insurance. A new survey from finds the “salary” such parents earn by dealing with laundry, kids, cooking, etc. is more than $121,000! That’s more of an attention-getting number than anything else because stay-at-home parents don’t actually “earn” that, but you get the idea.
Should a stay-at-home spouse pass away, the remaining parent would have to suddenly pay for childcare and everything else a stay-at-home parent does on a day to day basis. That’s why it’s essential the parent at home have a policy.

Myth 2: Life insurance is too expensive.

This is the biggest misconception about life insurance is the cost: A female age 42 bought a policy for $500,000 to protect her spouse and children in case of her untimely death for only 22.10 a month.
People think it’s expensive but term life insurance is very affordable.
Many people who are going without life insurance may really need it. Among the 35 million Americans households that have no life insurance, 11 million include children under age 18. Of those 11 million, 40% say they’d have trouble paying everyday bills if the breadwinner were to die today. That’s according to LIMRA, an insurance industry research outfit, which based its study on a survey of 3,766 households.

Myth 3: The choices are overwhelming.

There are many different types of life insurance. But for most people, the best choice is term life insurance and it is very affordable.
With term life, you determine the amount of coverage from $100,000 or $5,000,000 and the timespan for your protection, such as 10, 15, 20 or 30 years. If you die within the term, your beneficiary gets the money.
Online tools make it much easier to research and purchase a policy. You can get a customized quote from 1st Option Insurance life insurance quoting tool.

Myth 4: If you are young and healthy, you don’t need life insurance.

Your life insurance needs depend on many factors, but if possible, it’s better to buy a policy when you’re young and healthy and it costs the least. For example, 1st Option Insurance’s life insurance quoting tool shows a policy that costs $12 a month at age 30 will cost about $32 a month at age 50. Because you’re more likely to develop health problems as you age, the price goes up.

Myth 5: If you have health issues, you can’t get it.

On another side of the spectrum, most people will believe that if they have any kind of medical condition they are unable to apply for life insurance. This is not true! Diabetes, arthritis and high cholesterol are conditions that might mean a higher monthly premium but the good news is that insurance is still within reach. Doing some research on 1st Option Insurance’s quoting tool, it’s estimated that a 50-year-old man with high cholesterol and a family history of heart disease can buy a 20-year, $250,000 policy for $41 a month.

Myth 6: Life insurance through your employer is sufficient.

What most people don’t realize when they sign up for group life insurance is that in a lot of cases, the payout is very low. Maybe only twice your base salary. When you think about it, this may not be enough to cover for a small family. And that’s not including when you lose a job or quit your job… Once you leave your job, that policy doesn’t go with you. You lose that as well. Having a personal policy is the best bet!

Ena Kalkan is a staff writer at Insurance News, a personal finance website.