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What are life insurance risk classes?

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Your risk classification (a.k.a. risk class or rate class) is what ultimately determines how much you pay for your life insurance policy.

Risk classes can be divided between two groups: standard and substandard.

Standard Life Insurance Risk Classes

While each life insurance company may have slightly different names for their risk classes, for the most part, there are six standard risk classes:

  • Preferred Plus
  • Preferred
  • Standard Plus
  • Standard
  • Preferred Tobacco
  • Standard Tobacco

The Standard risk class indicates average health and normal life expectancy. If you’re healthier than the average person, you can qualify for better rates i.e. Preferred Plus, Preferred, and Standard Plus.

If you use tobacco products, you’ll be assigned Preferred Tobacco or Standard Tobacco. Someone of average health who uses tobacco will receive Standard Tobacco. If you’re healthier than average, you can qualify for Preferred Tobacco. Some companies are willing to offer non-tobacco rates for certain types of tobacco use, like cigars or chewing tobacco.

Most life insurance applicants will qualify for the standard ratings. However, don’t be discouraged if you believe you are too unhealthy. Quotacy can help you find coverage, even if your health is below average.

Substandard Life Insurance Risk Classes

If your life expectancy is below average, you’re considered high risk to insure and therefore will receive substandard ratings.

Substandard risk classes are expressed as a “table rating”. These table ratings run from Table A-J or 1-10, depending on whether the insurance company chooses alphabetical or numerical names.

As the table ratings descend, your life insurance premium increases 25% on top of the Standard risk class rate.

Certain health issues, like obesity, being in treatment for chronic illnesses or major health conditions, such as prior heart attacks, cancer, and diabetes, and abnormal lab results can result in being table rated.

Table Rating (alphabetical)Table Rating (numerical)Pricing
A1Standard + 25%
B2Standard + 50%
C3Standard + 75%
D4Standard + 100%
E5Standard + 125%
F6Standard + 150%
G7Standard + 175%
H8Standard + 200%
I9Standard + 225%
J10Standard + 250%

There are situations in which an applicant can carry too much risk for the insurance company. While being declined is rare, it’s possible. Thankfully, Quotacy works with over 25 of the nation’s top insurance companies and often are able to find our clients coverage.

You can still receive a Preferred or Standard life insurance risk class even if your health isn’t perfect.

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Life Insurance Risk Classes and the Cost of Life Insurance

The risk class you’re assigned to by the insurance company determines what your premium will be. Your risk class is determined by evaluating the following factors:

  • Your Age
  • Your Gender
  • Personal Medical History
  • Smoker Status
  • Marijuana Use
  • Height/Weight
  • Your Family Medical History
  • Prescription Record
  • Motor Vehicle Record
  • Your Job
  • Any Risky Hobbies You Participate In
  • Medical Exam Results

This list is not exhaustive, but includes the most common factors.

In general, a younger age group and better health correlates with lower life insurance premiums — but you can still receive a Preferred or Standard life insurance risk class even if your health isn’t perfect.

Also, your risk class isn’t set in stone. If you purchase a life insurance policy and later change your lifestyle habits, it’s possible to reapply and improve your risk class.

Pricing differs from one risk class to the next. So, it may be worth it to try reapplying for a better risk class in the future.

The table below shows how a risk class impacts the life insurance premium of a 35-year-old male applying for a 20-year $500,000 term life insurance policy.

Male, Age 35, $500,000, 20-Year Term
Risk ClassMonthly Premium
Preferred Plus$21.14
Preferred$26.00
Standard Plus$34.59
Standard$39.96
Preferred Tobacco$84.14
Standard Tobacco$118.14
Table 1/A Non-Tobacco$49.95
Table 2/B Non-Tobacco$59.94
Table 3/C Non-Tobacco$69.93
Table 4/D Non-Tobacco$79.92

Once your life insurance policy is approved and activated, your risk class won’t change unless you decide to reapply. If you’re given a Preferred Plus rating and end up being diagnosed with a severe medical condition, the insurance company can’t change your risk class. This is just one reason why we advise people to buy life insurance as soon as you need it.

What risk class will I qualify for?

Our term life insurance quoting tool allows you to see real-life pricing instantly. You’re able to enter many factors that impact a risk class, such as your age, height/weight, and smoking status, in order to get a good idea of what your policy may cost.

However, your official risk class will not be given to you until after the life insurance company reviews your application and whatever records they deem necessary to pull. You may also be required to take a free medical exam. These lab results will be reviewed by the life insurance company as well.

One of the greatest benefits of working with Quotacy is knowing that you will get the best possible risk class, meaning, the best price possible. When you apply, your Quotacy agent first reviews your application before it’s submitted to the insurance company.

If you have any risk factors that may have a significant impact on your risk class, your agent will shop the market to ensure you’re matched with the insurance company that will be most lenient with your application.

It may be surprising to learn that not all life insurance companies evaluate risk factors in the same way. For example, one company may be much stricter with a depression diagnosis than another. Or one company may place pipe smokers in the Tobacco Risk Class while another may approve them as Non-Tobacco.

Being paired with the right insurance company can save you hundreds of dollars in premium payments each year. Your Quotacy agent will work hard to find you the most affordable life insurance coverage.

Get a free, no-obligation term life insurance quote instantly without even giving away any contact information. When you’re ready to apply, the online application only takes a few minutes to complete. After submission, your Quotacy agent will keep you posted every step of the way.

Note: Life insurance quotes used in this article accurate as of August 18, 2021. These are only estimates and your life insurance costs may be higher or lower.

 

Watch the Life Insurance Risk Classes Video

Video Transcript

Welcome to Quotacy’s Q&A Friday where we answer your life insurance questions. Quotacy is an online life insurance broker where you can get life insurance on your terms.

I’m Jeanna and I’m Natasha.

Today’s question is:
 
What are life insurance risk classes?

 

Your risk class is what ultimately determines how much you’ll pay for your life insurance policy.

The different risk classes can be divided between two groups: standard and substandard. Let’s first review what the standard risk classes are.

Each life insurance company may have slightly different names for their risk classes, but, for the most part, there are six standard risk classes.

The Standard risk class indicates average health and normal life expectancy. If you’re healthier than the average person, you can qualify for better rates like Preferred Plus or Preferred.

If you use tobacco products, you’ll be assigned Preferred Tobacco or Standard Tobacco. Someone of average health who uses tobacco will receive Standard Tobacco. If you’re healthier than average, you can qualify for Preferred Tobacco.

If your life expectancy is below average and you’re considered high risk to insure, this is when the substandard risk classes come in.

Substandard risk classes are expressed as a “table rating”. These table ratings descend alphabetically or numerically, depending on the insurance company. With each descent, your life insurance premium increases 25% on top of the Standard risk class rate.

It’s possible that an applicant can be too risky for an insurance company to insure and will therefore be declined. But, thankfully, Quotacy works with over 25 of the nation’s top insurance companies and our agents can often find coverage for even the toughest cases.

So, the next big question is, how are the risk classes assigned?

When you apply for life insurance, your application goes through a process called underwriting.

Underwriting is an evaluation of a client’s health and medical history, occupation, hobbies, lifestyle, and financial status—basically, any factors that may affect an individual’s life expectancy.

In general, a younger age group and better health correlates with lower life insurance premiums — but you can still receive a Preferred or Standard life insurance risk class even if your health isn’t perfect.

Also, your risk class isn’t set in stone. If you purchase a life insurance policy and later change your lifestyle habits, it’s possible to reapply and improve your risk class.

Pricing differs from one risk class to the next. So, it may be worth it to try reapplying for a better risk class in the future.

As an example, this table shows how an assigned risk class impacts the life insurance premium of a 35-year-old male applying for a 20-year $500,000 term life insurance policy.

Once your life insurance policy is approved and put inforce, your risk class won’t change unless you decide to reapply.

For example, if you’re given a Preferred Plus rating and end up being diagnosed with a severe medical condition, the insurance company can’t change your risk class. This is just one reason why we advise people to buy life insurance as soon as you need it.

One of the greatest benefits of working with Quotacy is knowing that you will get the best possible risk class, meaning, the best price possible. When you apply, your Quotacy agent first reviews your application before it’s submitted to the insurance company.

If you have any risk factors that may have a significant impact on your risk class, your agent will shop the market to ensure you’re matched with the insurance company that will be most lenient with your application.

It may be surprising to learn that not all life insurance companies evaluate risk factors in the same way. For example, one company may be much stricter with a depression diagnosis than another. Or one company may place pipe smokers in the Tobacco Risk Class while another may approve them as Non-Tobacco.

Being paired with the right insurance company can save you hundreds of dollars in premium payments each year. Your Quotacy agent will work hard to find you the most affordable life insurance coverage.

If you have any questions about life insurance, make sure to leave us a comment.

About the writer

Headshot of Natasha Cornelius, a life insurance writer, for Quotacy, Inc.

Natasha Cornelius

Marketing Content Manager

Natasha is a writer and content editor at Quotacy. She is also co-host of Quotacy’s YouTube series. She can't get enough of life insurance and outside of work is also working toward her Chartered Life Underwriter designation. Connect with her on LinkedIn.