When you apply for a term life insurance policy, the underwriter will place you in a predetermined risk class or rating that will dictate the cost of your premiums. The better your risk class, the more affordable your life insurance will be.
The job of a life insurance underwriter is to estimate how long you will live. This determination is based on your physical characteristics, lifestyle, medical history and several other factors. If this information suggests that you are likely to have a long life, you will probably qualify for better life insurance rates.
The most common life insurance risk classifications are:
Preferred plus - Applicant is in excellent health and has no factors that would suggest future medical problems.
Preferred - A few minor issues, such as slightly high cholesterol, may be present.
Standard plus – Individual is generally healthy, but may be slightly overweight or have other health issues.
Standard - Applicant has average health, but may have minor medical issues and a parent who died due to disease before age 60.
Preferred smoker – For individuals who would otherwise fall into the regular "preferred" category, but smoke.
Standard smoker – For any smoker who is not in excellent health.
Many life insurance applicants do not fall into any of the above categories, but that doesn't mean that they aren't eligible for coverage. Survivors of critical illness or people who have a manageable disease like diabetes will need to speak with an independent life insurance agent to find out which companies are more likely to offer them a life insurance policy.
The first step in finding a quality life insurance policy is researching your options. For an online term life insurance quote, visit our website today.
Original article: What are life insurance risk ratings?
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