When you're approved for life insurance, your insurer will assign you to a risk class, also known as a rating category, based on your health and lifestyle.
The group you end up in determines how much you’ll pay for coverage. The healthiest people with the safest lifestyles are the least risky in the eyes of insurers. This is why insurers place them in categories that qualify for the lowest rates.
Did you know...
The average person usually falls into what insurers refer to as a “standard” risk class or life insurance rating category. The best rates are reserved for preferred risk classes. These are typically nonsmokers in excellent health.» MORE: Best life insurance companies
Life insurance risk classes explained
The best life insurance companies have several rating classes. Although the exact names differ from one company to the next, you can expect to find some generic categories:
Super preferred nonsmoker
Those in excellent health who haven’t smoked or used nicotine or nicotine substitutes for at least five years may get the best possible rates. Sometimes called preferred best, only about 5% of life insurance applicants will qualify for this risk class.
You’ll need to show you’re at a normal weight for your height, with normal blood pressure and cholesterol readings and a clean medical history. Generally, there can be no death due to heart disease or cancer of a parent or sibling before age 60 to qualify for this category.
Preferred nonsmoker
Insurers require excellent health, but you’ll get a little more leeway on blood pressure, cholesterol and weight. With some insurers, smoking the occasional cigar won’t disqualify you from preferred nonsmoker rates. However, the results from your nicotine test will still need to be negative.
A death of a parent or in some cases a sibling before age 60 from cancer or heart disease usually disqualifies you from this rate class.
Standard plus nonsmoker
This category is for nonsmokers who are generally in good health but don’t quite make the preferred category. Treatment for high blood pressure may be acceptable, for instance, as long as readings are in a normal range.
Standard nonsmoker
The average person falls into this category. Being overweight or receiving treatment for elevated blood pressure may be acceptable. For this category, the death of a parent or sibling before age 60 from heart disease or cancer isn't usually disqualifying.
Preferred smoker
This category is for smokers who otherwise would qualify for preferred rates. If you have recently quit smoking, you still may get smoker rates. Typically, you must be a nonsmoker for at least five years to qualify for the best nonsmoking rates. Quitting for three years can earn you the second-best rates, and one year smoke-free can qualify for standard nonsmoker rates.
Standard smoker
This rating category is for smokers who otherwise would fall into the standard nonsmoker category. The average smoker in good health would fall into this risk class.
Can you earn nonsmoker rates if you only smoke occasionally?
The risk class you’ll get assigned as a smoker will depend not only on how often you smoke but also what you smoke. For instance, some insurers may be more lenient about occasional cigars.
Preferred non-smokerIn excellent health with a negative nicotine test but smokes an occasional cigar.
Standard non-smokerGenerally in good health with a negative nicotine test but smokes an occasional cigar.
Preferred smokerSmokers in excellent health who currently smoke or recently quit.
Standard smoker Smokers who are in generally good health.
Loading
Missing the 'standard' cut: Table ratings explained
If you're an average person with a normal life expectancy, you'll probably qualify for standard life insurance rates.
Some people may not qualify for standard rates because of health conditions such as diabetes but will still be eligible for coverage. In cases like this, the insurance company assigns a “table rating.” Some companies use numbers, such as 1, 2 and 3, and some use letters, such as A, B and C. Each higher table rating typically adds another 25% to the standard rate. Thus, a table rating of C means a standard rate plus 75%.
Table rating | Additional percentage charged | Sample annual premium |
|---|---|---|
Standard | 0% | $250 |
Table 1 | 25% | $250 + $62.50 = $312.50 |
Table 2 | 50% | $250 + $125 = $375 |
Table 3 | 75% | $250 + $187.50 = $437.50 |
Table 4 | 100% | $250 + $250 = $500 |
Table 5 | 125% | $250 + $312.50 = $562.50 |
Table 6 | 150% | $250 + $375 = $625 |
Sometimes an insurer might attach a temporary extra charge, known as a “flat extra.” A cancer survivor, for instance, might qualify for standard rates plus a $5 flat extra per $1,000 of coverage for five years. On a $500,000 policy, that would mean an extra $2,500 a year in addition to the standard rate for the first five years.
If you don’t qualify for a low rate, you can ask the insurance company for the reason behind its decision. In some cases, the insurer may not have all the information it needed — and if you can provide it, the company will typically reconsider your rate.
What do life insurers consider when determining risk classes?
Every insurer has different rules for determining risk, but these are the factors that will have the most effect on your rate class.
🩺 Your health
Insurers will use a few things to evaluate your health. These can include height, weight, blood pressure, cholesterol and any conditions flagged during your life insurance medical exam.
👪 Family medical history
Your insurer might ask about a family history of heart disease, cancer or diabetes. You may also be considered a risk if a direct relative has died prematurely as a result of a serious medical condition.
🚬 Tobacco use
Smokers are at greater risk of respiratory and lung disease and are usually assigned rate classes with higher premiums. Chewing tobacco, marijuana and even occasional cigars might get you categorized as a smoker.
🪂 Your occupation and hobbies
The risks you might encounter on the job or in how you choose to spend your free time matter to life insurers. Hobbies like skydiving or scuba diving increase your risk of death. Dangerous occupations like logging or roofing might also result in higher life insurance rates.
Did you know...
🚘 Your driving record counts, too. You probably won’t make it into the top class if you’ve had a DUI conviction within the past five years. You’ll be disqualified from the best rating classes if your license has been suspended or if you’ve had more than two moving violations within the past three years.Will insurers look at my finances?
Financial underwriting is often overlooked. Insurance companies will consider your income and assets to determine if the amount of coverage you’ve applied for is justified. They will take into account the value of any other life insurance policies you already have, and let you know how much coverage you qualify for.
Your credit score also won’t affect your life insurance rates, but the insurer will look at the past seven years of your credit history. If you have a bankruptcy on your record, you may be deemed “riskier” to insure and may end up being charged a higher premium.
How to get better life insurance rates
You can’t control some factors, such as your family medical history, but you can make other changes to get more affordable life insurance.
Quit smoking
It may be easier said than done, but ditching the habit is a surefire way to get cheaper coverage. Smokers typically pay two to three times — or more — what nonsmokers pay for life insurance. You’ll need to abstain from tobacco for at least a year to qualify for nonsmoker rates at most companies.
Lose weight
If you’re overweight or obese, losing weight can also help you qualify for better rates. You can typically get life insurance if you’re overweight. But improving your blood pressure and cholesterol readings could reduce the premium you’re offered.
Shop around
This cost-saving strategy is essential because each insurer has its own underwriting criteria. Rates can vary — sometimes significantly. This means you might qualify as a preferred nonsmoker with one insurer and a standard nonsmoker with another.
An independent life insurance agent can help you navigate the rates from different insurers. This is especially important if you’re applying for life insurance with a pre-existing condition, such as a history of cancer. Risk factors can make it harder to qualify for the best rates, so you want to weigh all your options.
Find the right life insurance plan for you
Make sure you and your loved ones are covered - compare customized life insurance quotes from our partners.
