15 things? Don’t let that number intimidate you. Life insurance companies need to get a clear portrait of who they will be insuring—and that means looking at the applicant (you) from every angle in order to determine your life insurance premiums.
A one-size-fits-all policy simply doesn’t exist—that’s why there’s an application process behind purchasing your insurance plan. Every individual will have unique coverage needs—and a different life insurance premium rate, too.
Underwriters look at a number of data points, including your lifestyle, occupation, medical record, financial history, and driving record to place your application in a risk class. Your risk class determines how much you pay for life insurance.
Getting Started with Your Life Insurance Application Process
Before you purchase your term life insurance policy, an underwriter evaluates your application and determines if you are insurable—meaning that you can be considered an acceptable insurance risk.
If they determine that you are insurable, they will review the amount of coverage that you are eligible for based on your income, and finally, how much your life insurance premium will be.
» Calculate: Life insurance needs calculator
When an underwriter assesses your application to determine your life insurance premium, they use a complex underwriting process to determine their risk in covering you with term life insurance.
This means that the insurance company will look at a number of data points, including your lifestyle, occupation, medical record, financial history, and driving record to place your application in a risk class. Your risk class determines how much you pay for life insurance.
What Is a Risk Class? How Does It Affect My Life Insurance Premium?
A life insurance risk class reflects an assessment of a combination of factors that impact an applicant’s life expectancy.
Underwriters assign these risk classes based on how statistically likely it is that the applicant will have a long and healthy life—meaning not likely to develop a serious illness and die at an early age.
Non-smoking applicants are placed in one of the following categories:
- Preferred Plus
- Standard Plus
Preferred Plus means—you guessed it—that your application represents a highly-preferred category of risk for the insurer; while a Standard risk class means that your application is considered a standard acceptable risk. If underwriters determine that you fall into a Standard risk class then your life insurance premium will be higher but still quite affordable.
Smokers (or those who have quit smoking recently) are placed into Preferred Tobacco or Standard Tobacco classes—with Preferred risk class reflecting the fact that you are otherwise a highly-preferred risk, save for smoking status. Just like for non-smokers, a Standard risk class indicates that your application is an acceptable risk.
If term life insurance underwriters evaluate your application and determine that your profile doesn’t meet the requirements for standard life insurance risk classes, then your application will be table rated (evaluated according to a different set of criteria for non-standard risk) and your life insurance premium will cost more.
An underwriter isn’t a miser—eagerly scanning your application looking for any excuse (or 15 excuses) to lower your rating and raise your costs. They simply want to make certain that the applications that they approve for standard life insurance premium rates meet at least the minimum criteria set for an acceptable risk.
That said, it’s important to know what those are.
How Does My Health Impact My Life Insurance Premium?
Underwriters will examine your medical history and check your current health to build a portrait of your longevity, based on current life expectancy projections. Advances in medical technology can decrease mortality rates, in other words, an increase in the number of patients diagnosed with a critical disease that live, and life insurance underwriting guides are adjusted as necessary. In conjunction with this, the life insurance premium rates for applicants with different medical histories and health statuses are also adjusted to reflect an overall higher life expectancy.
The following is a quick overview of general health issues that term life insurance underwriters look at in determining how much you will pay for your coverage.
Underwriters look at how long your hypertension has existed and if it is well-controlled. If your blood pressure is well-managed and you have not suffered end-organ damage from your condition, your application may still fall within a standard risk class.
High levels of low-density lipoprotein (LDL), the bad cholesterol, may mean that you could be at risk for coronary artery disease or stroke. This will affect your life insurance cost.
Your LDL level (as rated by the Cleveland Clinic) is:
- Optimal if it is less than 100,
- Near optimal/above optimal if it is 100-129,
- Borderline high if it is 130-159,
- High if it is 160-189, or
- Very high if it is 190 or above.
If you do have coronary artery disease, click here for our insurance buyer’s guide.
#3 and #4 Height and Weight
The way that term life insurance underwriters look at height and weight may differ from the way that The Center for Disease Control and Prevention (CDC) recommends that we calculate our Body Mass Index (BMI). The CDC BMI chart is the one that you might see in your doctor’s office, showing you a range of weights that are considered healthy when you are a certain height.
However, an insurer will normally use a Build Chart to determine if you qualify for a standard risk class.
Here is a sample:
As you can see, this is a lot different from the CDC BMI range recommendations. However, each insurer’s criteria for determining how much your BMI will impact your life insurance premium cost will vary—some may be closer to the CDC guidelines; while others may be more lenient.
While it is sometimes possible to get life insurance when you are pregnant, it is best to apply, if possible, before you are expecting.
Underwriters will look at aspects of your pregnancy—such as if you are experiencing abnormal changes during your term or have a pre-existing condition—to decide how much it will impact your risk class to determine your life insurance premium.
» Compare: Term life insurance quotes
#6 Critical Illness
If you have had a serious illness that you have recovered from (bravo!) then your insurer will take this into account when determining your life insurance premium. But don’t be discouraged from applying—even those who have had a serious illness may be able to get life insurance.
Every insurer has a different method of determining how much a disease with a high survival rate (such as early stage breast cancer) might weigh into your risk class assignment.
#7 Well-Managed Health Issues
Some applicants who have serious medical conditions that are well-controlled (e.g.: epilepsy that is managed without incident by medication), may still become insured. Health issues that are stable and have remained so over a certain period of time are often classified differently than unstable conditions by the life insurance companies.
Life insurance companies don’t underwrite behavioral or mental health the exact same way.
For example, a 30-year-old male is diagnosed with bipolar disorder, but it’s managed well with medication, diet, exercise, and talk therapy. One insurance company may only offer him Table C and he will pay $49 per month for coverage. Meanwhile another life insurance company may offer him Standard risk class rating and he would pay $28 per month for the same coverage.
Quotacy is a life insurance brokerage company. This means that we work with multiple life insurance companies and advocate on your behalf to get you the best policy for the best price.
If you have been diagnosed with a mental or behavioral condition, having more company options increases your chances of being approved for life insurance coverage at a fair price.
Our in-house underwriters know which company to place your application with. The more truthful you can be with our agents about how you are managing your health, the better we can match you with the best life insurance companies for your medical condition.
Your application will require you to answer questions about your family medical history. If your family shows a history of inherited conditions, then your life insurance premium may be impacted. Some carriers, for example, do not weigh this as strongly as others in determining your risk class. Quotacy’s agents can guide you toward the best life insurance company for your family medical history.
#10 Illegal Drug Use
If you use cocaine (or another Class A-controlled substance), your life insurance application will be denied.
The presence of certain prescription medications that have a high risk of addiction (such as opioids) in your life insurance medical exam results may be inaccurately read as a reflection of substance abuse. So, make sure to tell your examiner about any medications or remedies that you are taking on the orders of your doctor (including medical marijuana, for example).
#11 Alcohol Use
An occasional drink won’t raise any alarm bells, but a history of alcoholism and diseases associated with it—such as cirrhosis of the liver and coronary heart disease—will affect your risk class and your life insurance premiums.
#12 Tobacco Use
Tobacco use will definitely impact your life insurance premium cost, but it won’t necessarily prevent you from becoming insured. Check out our advice on getting life insurance if you love to smoke. We cover cigarettes, cigars, pipes, electronic cigarettes, chewing tobacco, smoking cessation products, and marijuana in our life insurance buyer’s guide for smokers.
Yes, your age impacts how long you live.
The older you are when you purchase term life insurance, the more you will pay for your premiums. There are also top age limits for how you may be to get insured.
Unfortunately, many people wait to insure themselves until they have a life scare, such as a heart attack that forces them to think about death. If you are buying your first home, getting married, having a baby, or adopting a child, use this joyous occasion as an opportunity to buy life insurance. You’ll be happy you locked in your premiums at a younger age.
Fair or not, women tend to live longer than men. Life insurance companies offer lower life insurance premium rates to women in every state except Montana (where rates are gender-neutral according to state law).
#15 High Risk Jobs and Hobbies
If you work comfortable hours in a stimulating job with colleagues you adore—then your stress levels may be very low—all good for your medical exam and overall health.
If your hobby is piloting planes to take photos of erupting volcanoes that sounds wonderfully exciting and risky.
There are other factors that underwriters look at as well, such as your criminal record (incarcerated applicants will not be approved) and your driving record.
What You Can Do to Get the Best Possible Life Insurance Premium Rates
While many of the things that underwriters look at to determine your life insurance premium—like your age or occupation—can’t be changed to meet their requirements, you can take steps to control a few things—like your preparation for your medical exam.
You’ll want to avoid any chance that your health profile isn’t accurate because of a temporarily elevated blood pressure rate, for example, or high cholesterol level due to a few too many extra helpings at Thanksgiving. There’s no need to panic, but you can follow these tips to make sure you put your best foot forward.
Here are some tips for getting ready for your medical exam:
Don’t eat after 10 PM. Eating anything—even a small snack—can elevate your triglyceride and glucose levels (which doctors use to detect pre-diabetes among other conditions). It’s best to fast six to eight hours before your appointment. Try to schedule your exam for first thing in the morning—that way you won’t have to endure a day fighting hunger pangs and feeling sluggish.
Don’t touch that cup of joe or pop out for a quick cigarette. Try to limit your intake of both for 48 hours, but definitely don’t indulge less than an hour before your exam. Caffeine and nicotine can temporarily boost your blood pressure reading and speed up your heart rate.
Don’t show off at the gym the day before your appointment. Your workout can cause an elevated heart rate and blood pressure levels that may appear on a reading for a day (or more) after you’ve left the gym. It can also cause excess protein to be found in your urine that may be read during urinalysis as an early indicator of kidney or heart problems.
Avoid alcohol and foods high in fat, salt, and sugar. High amounts of alcohol, salt, and sugar can raise your blood pressure, blood sugar, and cholesterol levels, causing abnormal readings. Excess alcohol can also impact your liver function test (designed to detect early liver disease among other issues). It’s smart to avoid any alcohol a minimum of eight hours before your exam.
Following this advice has helped our clients get the best rates they can for their health status.
We’re happy to help you get the right term life insurance policy for your needs—one that is affordable and provides excellent coverage.
The simplest way to get the best life insurance premium rate is to find your term life insurance quotes online with Quotacy. Using our free comparison tool, you’ll be able to compare quotes from leading providers side-by-side and apply in less than five minutes.
Ready to get started? View your life insurance quotes without disclosing any personal info here.
About the writer
Director of Inbound Marketing
Kate is Director of Inbound Marketing working on business strategy, SEO, and writing for QuotacyLife. Kate's gift is explaining complex financial planning and life insurance topics in a simple and direct way to help families become more financially savvy and empower themselves to make wise choices. She works with Quotacy's underwriters to ensure the financial tips shared in her blogs are spot-on and truly helpful to anyone researching the ins and outs of life insurance online. If you would like a topic to be covered in our blog, leave Kate a comment below or connect with her on LinkedIn.