Life insurance carriers work by accurately assessing the odds of a person dying, and offering coverage to those people at prices proportional to the risk of that person’s death. When a carrier offers a policy to you, they’re essentially placing a bet on you to live past the term period of your policy.
If you apply for life insurance with a medical condition or lifestyle that lies outside the normal range of prices that carriers offer, you might be given something that carriers call a “Table Rating” on your official risk class, which is an increase in price based on the severity of your risk.
How Table Ratings Work
Basically, carriers assign a table rating to an insurance application by assigning “Risk Points” to every factor affecting how risky you are to insure. Carriers calculate these points based on the severity of the risk factors, with issues like a recent heart attack being riskier than something like a higher-than-average BMI. The more risk points they give you, the higher your table rating.
The following are a few issues that can result in a table rating from an insurance carrier. It’s not a complete list by any means, but these are some of the most common issues we see.
- Having a family history of Heart Disease or Cancer
- Type 1 or Type 2 Diabetes
- Some mental health issues, like severe depression and anxiety
- History of stroke
- Body mass index and build
- History of heart attacks, and time since your last heart attack
- Criminal Record
Understanding Your Table Rating
A Table Rating is used to modify the price that comes with a normal risk class, and they are most often paired with either the Standard Non-Tobacco or Standard Tobacco risk classes, since the medical issues that lead to table ratings will almost always keep you from getting a best-class offer.
For example, for a 30-year-old male applying for $500,000 in coverage for 20 years, a best-class policy would come out to around $240 per year. However, if the applicant was table rated, the rating would most likely be applied to a Standard-Class offer, which has a baseline cost of around $460.
Table ratings are often listed as letters (for example, Table A to Table G), or as numbers (Table 1 to Table 8) depending on the carrier. Lower ratings like Table 1 and Table A are the least costly, and higher ratings like Table 8 and Table G are riskier to insure, and therefore the most costly. While some carriers treat table ratings a little differently, for the most part, each table rating adds an extra 25% to the final cost of the policy.
This table illustrates the rate increases that would come with a policy approved at a table rating. To keep things simple, we’re going to round up and assume that our example policy approved for Standard rates would cost $500 annually.
|Percent Extra||Total Percent Paid|
Standard Table A
Standard Table B
Standard Table C
Standard Table D
Standard Table E
Standard Table F
|Standard Table G||175%||275%|
Insurance carriers offer these risk classes in order to ensure that they can cover everyone possible, and that even people with histories of medical complication can have access to insurance. Not all carriers treat every table rating case the same, and shopping around after a carrier issues you a table rating is one way to potentially lower your price.
Not all carriers treat every table rating case the same, and shopping around after a carrier issues you a table rating is one way to potentially lower your price..
If you were table rated for a condition that has the potential to get better over time, we typically suggest accepting your policy at the table rated risk class, and applying again in the future to try for a lower price. This is fairly common for people who need life insurance immediately, but want to work towards a lower price or a higher coverage amount in the future.
Here at Quotacy, our agents work closely with a variety of carriers across the U.S., and our online quoting tool can give you a pretty accurate idea of a baseline price for your policy. If you’d like to ask about how your medical issues might affect your price, get in touch with us, and our agents can fill you in on which carriers will treat your health condition the best.
Photo credit to: Kenny Louie
About the writer
Eric moved from sales to communications at Quotacy. His writing is informed by his experience guiding hundreds of people through their own life insurance buying journey. Eric lives in Minneapolis, where his coworkers are trying to convince him to start his own podcast, do stand-up, or take his humor into the spotlight. Connect with him on LinkedIn.