When you decide to take out a Life Insurance policy, the life insurance company looks at a few factors to decide what your premium rates will be.
One factor is your level of coverage, or the amount the company would pay in benefits if something happened to you. A higher level of coverage generally costs more.
Companies also consider your level of risk when figuring premium costs. They evaluate the chances of a claim and use standard risk categories to guide underwriting and pricing.
Preferred Class
Premiums in Preferred are relatively low. You may qualify for Preferred coverage if you are healthy and have few risk factors.
- Your weight is within the normal range for your height.
- No immediate family members died before age 60 from cancer or heart disease.
- Your cholesterol, blood pressure, and other values are normal.
- You have no chronic conditions.
Qualifying for Preferred Plus is more difficult than Preferred, and premiums in that class would be lower.
Standard and Substandard
Premiums in Standard are more expensive than Preferred because you have some risk factors, such as the following examples.
- Mildly elevated blood pressure or a slightly high LDL/HDL cholesterol ratio.
- Slightly overweight.
The cost of life insurance in the Substandard class can be three or more times as high as the cost in Standard. If you have an uncontrolled or advanced chronic condition or are very overweight, you may be placed in this category.
Classes Consider Nicotine
Smoking is a risk factor for many health conditions, including cancers, cardiovascular disease, and respiratory illnesses, and insurers typically charge smokers higher premiums.
You'll need to get estimates from specific life insurance companies before making a decision; being informed before you request quotes can help you make smarter choices. For more detail on how insurers set rates and what influences quotes, see Factors That Affect Life Insurance Quotes.
If you want personalized pricing or to compare options, consider contacting an agent to review your situation and talk to an agent.
Frequently Asked Questions
How does my health affect my premium class?
Insurers use medical history, current health measurements, and family history to assign a risk class, which strongly influences premiums.
Can weight alone place me in Substandard?
Being significantly overweight can move you to Substandard if it leads to other uncontrolled health issues, but mild overweight is often placed in Standard.
Do all insurers treat smoking the same way?
Most insurers apply higher rates for nicotine use, but the exact underwriting and testing policies vary by company.