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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.