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Your Guide to Life Insurance Risk Classification

June 26, 2023
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When you apply for a life insurance policy, the insurer uses “risk class” or “rate class” to decide how much your policy will cost. The terms are interchangeable and this process is known as life insurance risk classification.

How a company assigns risk differs slightly from one to the next, but they typically sort applicants into 1 of 22 unique classes.

In this guide, you’ll learn the various life insurance risk classifications, understand the factors that influence your assignment, and gain insights into the potential costs associated with each category.

Table of Contents

The Different Life Insurance Risk Classes

The most common risk classifications fall into one of three groups: preferred, standard, and substandard.

  • Preferred classes are reserved for the healthiest individuals and offer the best pricing.
  • Standard risk classes are for people with average health and life expectancy.
  • Substandard classes are for high-risk individuals.
  • Tobacco users have their own standard and preferred classes.

The Standard risk class is typically the starting point in life insurance underwriting. It represents an average risk compared to others within the same age and gender group.

Then, a life insurance underwriter looks for risk factors that may cause an applicant to be more or less likely to die before reaching their natural life expectancy. If an applicant is less likely to die early, they may be eligible for preferred risk classes. If more likely, they are assigned substandard risk classes.

We’ll review the risk factors underwriters look at later in this guide.

Preferred Risk Classes

Preferred risk classes include Preferred Plus and Preferred. Individuals healthier than the average person of their age and gender may be eligible for these classes.

Risk Classes
Preferred Plus
Standard Plus
Preferred Tobacco
Standard Tobacco

Being categorized as Preferred risk typically means that the applicant:

  • Has a clean medical history with no serious health issues.
  • Is not currently under any medication for chronic conditions.
  • Has no familial history of early-onset diseases such as cancer, diabetes, or heart disease.
  • Maintains a healthy height-weight ratio.
  • Demonstrates normal levels of cholesterol and blood pressure.
  • Has either never engaged in tobacco use or quit at least five years prior.
  • Does not partake in high-risk activities or work a hazardous job.
  • Maintains a stable financial record (e.g., no history of bankruptcy).
  • Holds a clean driving record with minimal violations.
  • Has never undergone treatment for substance abuse..

Standard Risk Classes

Standard risk classes include Standard Plus and Standard. Individuals with average health and life expectancy are often eligible for these classes.

Risk Classes
Preferred Plus
Standard Plus
Preferred Tobacco
Standard Tobacco

Being categorized as Standard risk may mean that the applicant:

  • Has a weight that’s a bit high for their height.
  • Is managing conditions like high blood pressure or high cholesterol.
  • Has a family history of early death due to heart disease or cancer (parent died before 60).
  • Has a few minor infractions on their driving record.
  • Has experienced a minor setback in their financial history.

However, like Preferred risk, applicants eligible for Standard typically do not participate in high-risk hobbies or work a dangerous job.

Substandard Risk Classes

Life insurance companies want to provide coverage for as many applicants as possible. But they need to balance their risk.

Risk Classes
Preferred Plus
Standard Plus
Preferred Tobacco
Standard Tobacco

Insurers consider individuals with higher-than-average risk as substandard. These companies require these individuals to pay higher premiums in exchange for high-risk coverage. One of two methods is often used to handle substandard risks: table ratings or flat extras.

Table Ratings

You usually get a table rating when put into the substandard risk class.

The range of these ratings can vary between insurance companies. Some insurers use a numerical system (1-16), while others use letters (like A-P).

Table ratings help decide the cost of a life insurance policy. They take the Standard price and add a certain percentage. So, Table 1/A means 25% extra on top of the Standard cost. Table 2/B means 50% extra. Table 3/C is 75% extra, and so on.

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%

Factors that may cause an applicant to be table rated can include:

  • Chronic health conditions: Diabetes, heart disease, or high blood pressure can often lead to higher risk classifications.
  • Obesity: Being significantly overweight can result in a higher risk rating due to the associated health issues.
  • Hazardous jobs or hobbies: Jobs or hobbies that are deemed dangerous, such as professional race car driving, commercial fishing, or skydiving, can increase an applicant’s risk profile.
  • Substance abuse history: Drug or alcohol abuse contributes to a higher risk class.
  • Mental health conditions: Poorly managed conditions can increase rates, while well-managed conditions may not have much impact — if any.

After reviewing an applicant’s medical exam results and records, the insurer will assign a table rating according to its underwriting guidelines if the applicant represents an increased risk over a standard rating. It’s important to note that a substandard rating is only one company’s opinion. Another insurer given the same information may apply a different rating and place the applicant in either a higher or a lower rating category.

If you have risk factors that might affect your pricing, working with an independent broker is beneficial. Brokers, like Quotacy, have access to numerous insurance companies. When reviewing your application, we’ll shop around to find the insurer that will be the most lenient and, therefore, the most affordable.

Flat Extras

Sometimes an insurance company might charge an extra fee on top of a regular premium to balance substandard risk. This is called a Flat Extra Premium.

Flat extras are usually given instead of a table rating if the risk factor is constant, such as deafness, or if the risk factor is decreasing, such as the aftermath of surgery. They may also be used in nonmedical instances to cover the risk associated with a specific job or hobby.

The flat extra is a specific added dollar amount per $1,000 of insurance coverage. These flat extras can be permanent or temporary. It’s possible that you’re in perfect health and still get assigned a flat extra.


John is a healthy, non-smoking 35-year-old man who loves skydiving and makes about 15 jumps yearly.

Because of his skydiving hobby, the insurer approves John with a $2.50 flat extra. So, if John buys a policy with a $100,000 death benefit, he would have to pay an extra $250 per year ($2.50 x 100) on top of his regular premium.

This flat extra charge helps the insurance company offset the increased risk of insuring a skydiver. However, it’s important to note that if John were to quit skydiving, he could notify his insurer, and they may be willing to remove the flat extra charge from his policy since the risk is gone.

Tobacco Risk Classes

Any nicotine or tobacco use can affect how a life insurance company assesses an applicant’s risk. These applicants will likely fall into one of the tobacco risk classes.

Risk Classes
Preferred Plus
Standard Plus
Preferred Tobacco
Standard Tobacco

A person is a nicotine user if the following types of tobacco were used in the last year:

  • cigarettes
  • cigars (except for the occasional use)
  • pipes
  • smokeless tobacco
  • chewing tobacco
  • snuff
  • nicotine substitutes, including patches and gum
  • electronic (smokeless) cigarettes

There are two main smoker classifications: Preferred Tobacco and Standard Tobacco.

  • Preferred Tobacco means that after reviewing your health, family history, and lifestyle habits, the underwriters would have considered you Preferred or Preferred Plus if it wasn’t for your tobacco use.
  • Standard Tobacco mirrors the Standard or Standard Plus non-tobacco risk classes.

However, some insurance companies are more flexible with certain usages, such as cigars or chewing tobacco. With the right insurer, qualifying for the more affordable non-tobacco risk classes is possible. This is another situation where using a broker is beneficial.

Do you enjoy tobacco? Learn how to get the best life insurance rates as a tobacco user.

See what you’d pay for life insurance

Comparison shop prices on custom coverage amounts from the nation’s top carriers with Quotacy.

How Your Risk Class Is Determined

Before someone can buy a life insurance policy, they must meet the company’s criteria for approval. This process is managed by life insurance underwriters who evaluate applicants to decide if they qualify for coverage and which risk class to assign.

Underwriters examine a wide range of factors, including:

  • Age and gender
  • Height and weight ratio (build)
  • Overall physical health (including eyesight, hearing, heart health, lung function, dental health, kidney function, nervous system, and general health)
  • Personal medical history (including past and present medications, diagnoses, and treatments)
  • Family medical history (especially concerning hereditary conditions)
  • Lifestyle habits (such as alcohol, drug, and tobacco use)
  • Financial stability
  • Driving record
  • Any hazardous jobs or hobbies
  • Criminal record

This data is collected from various sources, including the initial application, the Medical Information Bureau, prescription databases, medical exam results, medical records, motor vehicle records, credit reports, and background checks. Not all of these sources are used for every applicant, as the underwriting process is tailored to each individual.

How Long Does Underwriting Take?

Once the underwriter has all the necessary information, they determine whether or not the insurer should take on the risk of insuring the applicant. The process can often take 4-6 weeks, but it may be shorter or longer depending on the individual’s circumstances.

Some applications can be processed instantly through automated underwriting, but this is not suitable for all applicants. If an applicant’s situation is more complex, the underwriting process could span several months.

If you have a pre-existing condition, it can be more difficult to get affordable life insurance — or any coverage at all. Learn how different conditions impact rates.

How Risk Classification Affects Premiums

Life insurance fundamentally revolves around managing risk. When individuals purchase life insurance, they do so to protect their loved ones from the risk of potential financial hardship should they pass away.

On the other hand, insurance companies also need to manage their risk. They have to balance the risk of taking on new policyholders while ensuring they can meet their obligations to pay death claims and remain profitable.

The key to managing this risk is ensuring policyholders pay premiums according to their risk levels. An individual at low risk of passing away would generally pay lower premiums, while a person with a higher risk would typically be charged higher rates.

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$20.21
Standard Plus$33.76
Table 1/A Non-Tobacco$40.29
Table 2/B Non-Tobacco$46.82
Table 3/C Non-Tobacco$53.35
Table 4/D Non-Tobacco$59.88
Preferred Tobacco$82.28
Standard Tobacco$106.87

Once your life insurance policy is approved and activated, your risk class won’t change unless you reapply. If you’re given a Preferred Plus rating and are 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 it’s needed.

Explore different life insurance policies and their average monthly costs

Tips to Improve Your Risk Class

Risk classification is very individualized. You can take steps to increase your chances of getting approved for life insurance and improve your risk class.

Maintain a Healthy Lifestyle

Living a healthy lifestyle can go a long way in improving risk classification.

This could include:

  • Adopt a balanced diet rich in fruits, vegetables, whole grains, and lean proteins.
  • Regular physical activity – this doesn’t necessarily mean intensive gym workouts; even daily walks or activities like gardening can help.
  • Avoid harmful habits like smoking or excessive alcohol consumption.

Get Regular Check-ups and Medical Tests

Preventive health check-ups can help detect and address potential health issues early. Regular screenings, such as blood pressure checks, cholesterol levels, diabetes screenings, and cancer screenings, can help manage health risks.

Maintain healthy blood work and keep up with health screenings to improve your risk classification for life insurance.

Reduce High-risk Activities

Engaging in high-risk activities like extreme sports (e.g., skydiving, rock climbing), dangerous hobbies, or hazardous occupations can negatively impact your risk classification.

Reduce participation in these activities or take precautions to make them safer to improve your risk class.

Financial Planning and Stability

Insurance companies also consider financial health as a factor in risk classification. Consistently paying bills on time, maintaining a stable income, reducing debt, and avoiding bankruptcy can all help to improve your financial stability.

Having a clear and well-planned financial future can positively impact risk classification.

However, if you still need life insurance to protect your loved ones, don’t wait any longer. We recommend you apply for life insurance as soon as you need it. You never know what the future holds.

Work with Quotacy to Find Your Best Risk Class & Rate

Even if you’re concerned you won’t be approved or qualify for affordable coverage, we still suggest applying. Submitting an application doesn’t mean you need to purchase coverage. With the help of a good broker, you might get a better deal than you expect.

Take Quotacy, for instance. We’re life insurance matchmakers. We partner with over 25 top-rated life insurance companies across the country. When you apply with us, we assign a dedicated agent just for you. If you have risk class concerns, your agent will shop the market to ensure you end up with the company that will give you the best risk class.

Being paired with the right insurance company can save you hundreds of dollars in annual premium payments. 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 giving away any contact information. When you’re ready to apply, completing the online application only takes a few minutes. After submission, your Quotacy agent will keep you posted every step of the way.

Note: Life insurance quotes used in this article are accurate as of June 26, 2023. These are only estimates and your life insurance costs may be higher or lower.

Watch the Life Insurance Risk Classes Video


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