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Life insurance is not one-size fits-all. Your life insurance needs are probably different than your neighbor’s. And guess what else? You will probably be in a different insurance risk class than them too.

What are life insurance risk classes?

Risk Classes are categories that life insurance companies use to group people with similar health and lifestyle risks. Companies create these classes by using data to determine which factors affect a person’s life span, and weighing how important each risk factor is.

Basically, the lower your risk of death, the better your risk class will be, with better risk classes meaning lower premium payments on policies.

These risk classes are typically organized as follows, though some carriers may use different names.

Risk Classes
For Non-Tobacco UsersFor Tobacco Users
Preferred PlusPreferred Tobacco
Preferred
Standard PlusStandard Tobacco
Standard
Table Ratings

People in excellent health without any big risk factors for coverage will most likely end up rated at Preferred Plus, giving them the lowest possible premium payment. Those with health problems will often be approved at a higher risk class, meaning a higher cost of coverage.

Smokers and tobacco users have their own sets of prices due to the effect smoking has on a person’s health. For people who have quit smoking, the amount of time that has passed since you quit will determine which non-tobacco risk classes they are able to offer you.

The life insurance industry is extremely competitive, so the different companies allow flexibility on certain factors in order to get an edge on their competition and remain competitive. This is why when you run term life insurance quotes on Quotacy you’ll often see certain companies offer lower prices than others for your specific situation.

For example, while every company classifies a regular cigarette smoker as a “tobacco user,” some companies may make exceptions for people who only smoke the occasional cigar or two and offer nonsmoker prices, which will often cut your price nearly in half.

Every risk factor on every policy is reviewed on a case-by-case basis, with consideration to your age, gender, family history, and how your risk factors interact with one another to affect your overall health.

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How do I get assigned to a risk class?

Basic life insurance quotes are based on your smoking status, height/weight, gender, family history, and age. These provide a decent snapshot of your health at a glance, but it’s nowhere near enough information for a carrier to offer a policy.

Once you actually begin an application, the carrier will collect more detailed health information through your phone interview, your medical exam (though some policies allow you to skip this exam), and your medical records, which they order from your doctor.

The information carriers gather about your health and lifestyle will then be taken into account by a carrier’s underwriting team. Once the carrier has all the information they need, you are placed into your final risk class and officially offered a policy.

Every risk factor on every policy is reviewed on a case-by-case basis, with consideration to your age, gender, family history, and how your risk factors interact with one another to affect your overall health.

Below is an example of how one life insurance carrier looks at various health conditions and assigns risk classes. This chart isn’t comprehensive, but it can give you a good idea of what carriers look at when assigning a risk class.

Sample Non-Tobacco Risk Classes
Risk FactorPreferred PlusPreferredStandard PlusStandard
Blood PressureCurrently well controlled with or without treatment, with the average readings in the past two years not greater than 136/86.Currently well controlled with or without treatment, with the average readings in the past two years not greater than 146/90.Currently well controlled with or without treatment, with the average readings in the past two years not greater than 152 / 92.Currently well controlled with or without treatment, with the average readings in the past two years not greater than 156 / 94.
Cancer HistoryOnly available on certain types of skin cancer.Only available on certain types of skin cancer.Available depending on type and date of onset of cancer.Available depending on type and date of onset of cancer.
Driving HistoryNo more than 2 moving violations in last 3 years. No DWI, DUI, reckless driving, license revocation or suspension in last 5 years.No more than 2 moving violations in last 3 years. No DWI, DUI, reckless driving, license revocation or suspension in last 5 years.No more than 3 moving violations in last 3 years. No DWI, DUI, reckless driving, license revocation or suspension in the last 3 years.No more than 4 moving violations in last 3 years. No DWI, DUI, reckless driving, license revocation or suspension in the last 2 years.
CitizenshipMust be permanent U.S. resident for past 3 years as either a U.S. citizen or Permanent Visa or Green Card holder.Must be permanent U.S. resident for past 3 years as either a U.S. citizen or Permanent Visa or Green Card holder.Must be permanent U.S. resident for past 2 years as either a U.S. citizen or Permanent Visa or Green Card holder.Must be permanent U.S. resident for past 2 years as either a U.S. citizen or Permanent Visa or Green Card holder.
Substance and Alcohol AbuseNo abuse.No abuse in past 10 years.No abuse in the past 7 years.No abuse in the past 7 years.
Tobacco HistoryNo use of tobacco or nicotine-based products in last 36 months. One cigar allowed per month with HO specimen negative for cotinine.No use of tobacco or nicotine-based products in last 24 months. One cigar allowed per month with HO specimen negative for cotinine.No use of tobacco or nicotine-based products in last 12 months. One cigar allowed per month with HO specimen negative for cotinine (for Standard Non-Tobacco.)

If you see something you can relate to on the chart, please note that these are just possible ratings that a certain condition may fall into. Life insurance companies underwrite the individual, not just the impairment. Every application is reviewed very carefully, and many factors go into the underwriters’ decision-making.

Tobacco Risk Classes

If you use tobacco, you’ll most likely be put in one of the “tobacco” risk classes. If you currently smoke cigarettes regularly, carriers will almost always put you into a tobacco risk class. However, certain companies are more flexible if you only smoke cigars or e-cigarettes, or use chewing tobacco.

But again, all the companies view these usages differently. There are two main smoker classifications: “Preferred Tobacco” and “Standard Tobacco.”

Essentially, if you are offered a policy at the “Preferred Tobacco” risk class, this 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.

The same goes for “Standard Tobacco,” which mirrors the “Standard” or “Standard Plus” non-tobacco risk classes.

Table Ratings

If you have a complicated health history, you may be “Table Rated.” This means that your risk factors fall outside of the standard risk classes, and require special pricing to insure.

Life insurance carriers want to offer coverage to anyone if it’s possible, so they are able to modify prices to match your risk. Most table rating systems take a normal risk class, like Standard, and increase the regular premium payments by 25% for every step you go down the table.

For example, if the price to insure you at a Standard rate would be $40 per month, having a Table B rating would add 50% to the base cost, making your policy $60 per month instead.  If you’re rated at Table 3, you would pay Standard prices plus 75%, so $70 per month total.

Take a look at the sample prices below for an idea on how risk class affects the cost of life insurance.

Because each carrier looks at your case a little differently, applying for life insurance on your own can cost you money if you don’t compare prices from multiple companies. Here at Quotacy, we don’t get paid on commission, and we work with every top-rated life insurance carrier. This means that we’re always on the lookout for the best price for you.

Get a term life insurance quote today and see what your life insurance premiums may cost.  It’s easy, anonymous, and the first step in financial protection for your loved ones.

Photo credit to: Moos-Media

About the writer

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

Natasha Cornelius

Writer, Editor, and Co-host of Quotacy's Q&A Fridays

Natasha is the content manager and editor for Quotacy. She has been in the life insurance industry since 2010 and has been making life insurance easier to understand with her writing since 2014. When not at work, she's probably studying and working toward her Chartered Life Underwriter (CLU) designation while throwing a tennis ball for her pitbull mix, Emmett, or curled up on her couch watching Netflix. If it’s football season, the Packers game will be on. Connect with her on LinkedIn.

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