Life insurance health ratings refer to the classification of an individual’s health as it pertains to their eligibility for a life insurance policy and the premium rates they will be offered. Or to state it a different way, your life insurance health rating is what ultimately determines what your life insurance will cost. The better your rating, the lower your rates.
When considering what rate class you can qualify for, it’s important to understand that insurers will use a variety of factors, including medical history, age, and lifestyle habits, to determine an applicant’s health rating. And that these “factors” can vary from one insurance company to another.
You see, each company may have its own guidelines as to what makes one applicant a “preferred” applicant vs. what makes them a “standard” applicant.
Some insurance companies may choose to consider additional “lifestyle choices” in determining what one’s heath rating should be that other insurance companies don’t factor in. Examples of such may include types of tobacco use, travel destinations, employment choices, recreational marijuana use, etc…
For this reason, we wanted to create a guide which discusses some of the factors that will come into play when applying for a traditional term or whole life insurance policy and how those factors can determine what health class you qualify for, and thus what price you will pay.
Questions that will be covered in this article will include:
- What is a life insurance “health rating”?
- How do life insurance companies determine an applicant’s health class?
- Do all life insurance companies use the same criteria when determining one’s health class?
- How does a life insurance company determine one’s health class if they don’t require one to take a medical exam?
- Is there any way someone can improve their life insurance health class?
- What are some steps one can take to ensure they apply with the right life insurance company for them?
So, let’s dive right in!
What is a life insurance health rating?
As mentioned above, a life insurance health rating (of health class) is a classification that a life insurance company assigns to an applicant based on their overall health. Health ratings are used to determine the premium that an applicant will pay for a life insurance policy. The better an applicant’s health rating, the lower their premium is likely to be.
There are several categories of risk that you can fall under. As mentioned above, there are multiple factors insurance companies take into account when determining your risk.
The different health rating categories you can qualify for include:
- Preferred Best or Preferred Plus
- Standard Plus
- Substandard or Table Rated
There are also tobacco health ratings, such as
- Preferred Tobacco
- Standard Tobacco
- Substandard Tobacco
Substandard rankings usually range from A to P or 1 to 16 depending on how an individual life insurance carrier prefers to classify their applicants with each descending number or letter adding an approximate cost of 25% above and beyond the cost of a standard rate.
Why Does my Life Insurance Health Rating Matter?
Life insurance companies use your health rating to determine what health category you are in. Premiums are going to be lower for applicants who qualify for the best health rating, versus applicants who are considered standard (or lower).
To qualify for the best life insurance rates, you will want to try and get the best health rating possible. The insurance companies know that the healthier you are today, the longer you will live on average. And the longer you live, the less risk the insurance company takes on. And the less risk an insurance company takes insuring you, the lower your premium will be.
How do life insurance companies determine an applicant’s health class?
Life insurance companies use a variety of factors to determine an applicant’s health class, including their medical history, family medical history, lifestyle, and occupation. They may also request a medical examination to gather additional information about the applicant’s health.
The specific factors that a life insurance company considers can vary, but some common ones include:
- Medical history: The applicant’s medical records and any previous diagnoses or treatments can provide insight into their current and future health.
- Family medical history: The applicant’s family medical history can provide clues about the applicant’s potential for developing certain health conditions.
- Lifestyle: Factors such as an applicant’s diet, exercise habits, and substance use can impact their health.
- Occupation: Some occupations may be more hazardous or stressful than others, which can impact the applicant’s health.
- Driving record: Does the applicant have a history of speeding, DUIs, or DWIs?
- Prior felony or misdemeanor convictions: certain felonies and misdemeanors are looked at differently than others.
- Travel history or future travel plans: i.e. are you planning a trip to the Greek Islands or maybe to Afghanistan?
Based on this information, the life insurance company will assign the applicant to a health class. As shown above, health classes range from preferred plus (the best rating) to standard, and each class has its own set of premiums. Applicants who are in better health typically qualify for lower premiums.
Do all life insurance companies use the same criteria when determining one’s health class?
No, not all life insurance companies use the same criteria when determining an applicant’s health class. While most life insurance companies consider similar factors, such as medical history, family medical history, lifestyle, and occupation, the specific criteria and weighting of these factors can vary from company to company.
Some insurance companies may also view certain “risk factors” differently than another. For example, some insurance companies may be very hesitant about insurance someone who has been diagnosed with diabetes regardless of how well it is being controlled, while others may view the very same applicant as a Standard or Normal risk.
Other areas where we see significant differences between carries would include the treatment of:
- Certain weight class,
- Tobacco use,
- Marijuana use,
- Anxiety and depression.
How does a life insurance company determine one’s health class if they don’t require one to take a medical exam?
If a life insurance company does not require a medical examination, they will rely on the information provided on the application questionnaire and any other available records to determine the applicant’s health class.
This may include reviewing the applicant’s:
- Prescription data base records,
- DMV report,
- Criminal background check,
- Medical records (if requested),
As well as a standard Medical Information Bureau (MIB) report.
Medical Information Bureau (MIB):
The Medical Information Bureau (MIB) is a non-profit organization that maintains a database of medical and lifestyle information for life and health insurance companies. The MIB’s database contains records of medical conditions, treatments, and other health-related information that has been reported by member insurance companies.
When you apply for life or health insurance, the insurance company will typically check the MIB’s database as part of the underwriting process. The company will look for any information that may be relevant to your application, such as a history of medical conditions or treatments.
If the MIB has a record of a medical condition or treatment that you have not disclosed on your application, the insurance company may request additional information or clarification.
Is there any way someone can improve their life insurance health class?
There are a few ways that someone may be able to improve their life insurance health class, although the specific steps will depend on the factors that are affecting their health rating. Some potential options could include:
- Improving overall health: Making healthy lifestyle changes, such as exercising regularly, eating a healthy diet, and quitting smoking, can help improve an individual’s health and potentially their life insurance health class.
- Receiving treatment: If an individual has a medical condition that is affecting their health class, receiving treatment from a healthcare provider may help improve their health and potentially their health class.
- Updating their medical records: If an individual has received treatment for a medical condition and their health has improved, they may be able to provide updated medical records to the life insurance company to show their improved health.
- Delaying or postponing your application until such a time when your health rating might improve. For example, if you currently have 3 speeding tickets on your driving record, with one only weeks away from being expunged, you might want to consider waiting until that violation is no longer on your record before applying for coverage. Particularly if you already have a life insurance policy in place. For those without coverage, if might be better to simply apply for coverage, so that you can become insured, and then simply reapply when you can qualify for a better rate later on.
What are some steps one can take to ensure they apply with the right life insurance company for them?
If you are young and healthy, chances are you will qualify for the best life insurance health class available. But for the rest of us, what are some things we can do to get the best life insurance rates available?
- Apply with the Right Company
It cannot be understated that the key to getting the best life insurance health ratings, and in turn, the best life insurance rates, is to apply with the right company from the start.
Some companies cater to certain health issues, lifestyle choices, and occupations.
Therefore, if you have a health issue, a dangerous hobby or a risky occupation, apply with the most accommodating insurance company out there.
- Ace the Paramedical Exam
By knowing what life insurance medical exams test for and following our tips to passing the life insurance medical exam, you can put yourself in a great position to get the best life insurance rates.
Some things to consider leading up to your life insurance medical exam include:
- Fast for 12 hours prior to the exam
- Eat healthy foods that tend to help your blood work one week in advance
- Raw carrots
- High fiber foods
- Low Sodium Intake
- Avoid supplements
- Avoid Alcohol 24 hours prior
- Avoid excess sugar intake
- Avoid strenuous exercise 24 hours prior
- Wear light clothing
- Stand up tall when being measured for height
- Relax and lay off the coffee until after the exam
- (You don’t want your blood pressure to be elevated)
- Stop the Risky Behavior
There are some easy fixes that can help you get a better health rate class for life insurance. For example, if you smoke, quitting the habit can save you a significant amount of money. Similarly, if you engage in a risky hobby, like skydiving, giving it up could prevent an increased premium due to your dangerous avocation.
However, as you can see, there are many variables that come into play when determining one’s health rating and the rate an individual will receive when applying for a traditional term or whole life insurance policy. That’s why we believe it’s crucial to work with an insurance broker who has access to dozens of different insurance companies to find the right policy for your unique situation.
Having options is essential, and a good agent can provide the flexibility needed to find the best insurance company and policy for you. By working with an insurance broker, you can have peace of mind that you are getting the coverage you need at a price you can afford.
Frequently asked questions
What is a life insurance health rating?
A life insurance health rating is a measure of an individual’s health status and overall risk of mortality. It is a rating assigned by a life insurance company to determine the premiums an individual will pay for their life insurance policy. The rating is based on various factors, such as age, gender, medical history, family medical history, current health status, lifestyle habits, occupation, and hobbies. The better the health rating, the lower the premiums, and vice versa.
Why does a life insurance health rating matter?
A life insurance health rating matters because it directly affects the premiums an individual will pay for their policy. The better the health rating, the lower the premiums, and vice versa.
How do life insurance companies determine health ratings?
A life insurance health rating matters because it directly affects the premiums an individual will pay for their policy. The healthier an individual is, the lower the risk of mortality and therefore the lower the risk for the insurance company. As a result, individuals with better health ratings are assigned lower premiums, while those with lower health ratings are assigned higher premiums to offset the additional risk. Therefore, having a good health rating can significantly reduce the cost of life insurance over the long term.
What factors do life insurance companies consider when assigning a health rating?
Life insurance companies consider a wide range of factors when assigning a health rating, including age, gender, medical history, family medical history, current health status, lifestyle habits, occupation, and hobbies.
What are the different health classes for life insurance?
The different health classes for life insurance policies vary by insurance company but generally include Preferred Plus, Preferred, Standard Plus, Standard, and Substandard. The higher the health class, the lower the premiums an individual will pay.
How can I qualify for the best health class when applying for life insurance?
To qualify for the best health class when applying for life insurance, there are several things you can do:
- Maintain a healthy lifestyle: This includes regular exercise, eating a balanced diet, getting enough sleep, and managing stress.
- Quit smoking: If you are a smoker, quitting the habit can significantly improve your health rating and reduce your premiums.
- Get regular check-ups: Regular check-ups with your doctor can help detect any health issues early and get them treated promptly, which can improve your overall health rating.
- Manage any existing health conditions: If you have any existing health conditions, such as high blood pressure or diabetes, it’s important to manage them properly with medication, lifestyle changes, or both.
- Avoid risky activities: Engaging in risky activities, such as extreme sports or dangerous hobbies, can increase your risk of injury or death and negatively impact your health rating.
- Consider a medical exam: Some life insurance companies require a medical exam as part of the application process. If you are in good health, a medical exam can help you qualify for a better health rating and lower premiums.
By taking these steps, you can improve your chances of qualifying for the best health class and getting the lowest possible premiums on your life insurance policy.
Can I improve my health rating over time?
Yes, it is possible to improve your health rating over time by adopting healthy habits such as exercising regularly, eating a balanced diet, avoiding tobacco and excessive alcohol consumption, and managing any medical conditions through proper treatment and monitoring.
What happens if I don’t qualify for the best health class?
If an individual does not qualify for the best health class, they may be assigned a lower health class, which will result in higher premiums for their life insurance policy.
Is it possible to switch life insurance policies or providers if I receive a lower health rating?
Yes, it is possible to switch life insurance policies or providers if you receive a lower health rating. Life insurance policies are not set in stone, and you have the right to change providers or policies if you are not satisfied with the terms or premiums.
If you receive a lower health rating than expected, it may be a good idea to shop around and compare policies from different providers. Some insurance companies specialize in high-risk clients and may offer better rates than others. You can work with an insurance broker who can help you find the best policy for your unique situation.
It’s important to note that switching policies or providers may require you to go through the application process again, which could include a medical exam and other requirements. Therefore, it’s essential to carefully consider all options before making a decision to switch policies or providers.
Can I appeal a health rating decision made by a life insurance company?
Yes, individuals can appeal a health rating decision made by a life insurance company. However, it is important to provide evidence to support the appeal, such as additional medical records or test results that may have been overlooked during the initial evaluation.