Health class ratings are a rating system used by insurance companies to determine your health status. Higher health ratings are given to people with excellent health while it goes down for ailments or diseases. The determination is done by the underwriter depending on a number of clauses like age, medical records and current health.
People in higher health classes typically pay a lower premium compared to low rating holders. A good health means less risk on part of the insurance company and hence the lower rates. You can use the instant term life coverage quote form located on the site to get a quick quote now!
Factors that Determine Health Class Ratings
An insurance company will go to lengths to track all medical details about you and your family. The underwriter appointed by the carrier will gauge various factors and determine your life expectancy. People with high life expectancy achieve higher ratings and get to avail lower premiums. Smokers and public with health issues generally fall into lower health classes and end up paying higher premiums.
Depending on the company there are 12 to 15 health class ratings which are used to mark the applicants. The first 4 qualifies as health ratings while the rest are considered as table ratings. The factors that are taken into consideration include:
· Information derived from life coverage application form
· Medical evaluation and exam at time of application
· Driving history, financial reports, police files, etc
· Family history, location, behavior, profession, etc
Different Life Insurance Health Class Ratings
Here is a look at the different health class ratings that have been made for different people according to the type of lifestyle they lead.
Smokers VS Non-Smokers
There is a big distinction even before your rating process begins. Being a smoker or tobacco user increases the risk factor and attracts higher premiums even if your health is perfect. Use of other products like marijuana, snuff, chewing tobacco, nicotine alternatives like gums and patches, pipes, cigarettes, etc within the past one year also marks you as a smoker.
Preferred Select
Only 5% applicants make to this class which is also known by other names like Preferred Elite/Plus, Super Preferred etc. People with excellent health with no history of family diseases make this class. They maintain the recommended weight and do not take any medication.
Preferred
People with minor health problems like gastrointestinal problems or cholesterol are considered Preferred class. The issues can be fixed by medication and the overall health otherwise is perfect. Dangerous occupation, high-risk sports or family medical history are not taken into account.
Rate of Premium varies from 20% to 30% higher than Preferred Select
Standard Plus
People who do not otherwise qualify for the above classes yet have a good health are put into Standard or the Select class. Negative family medical history, obesity, high blood pressure, etc keep them from getting lower premiums.
Premiums are more than 25% to 45% than Preferred
Standard
Most of the applicants are given the Standard class rating. People with average life expectancy with minor health problems like being overweight fall into this class. A family history with premature deaths also forms a consideration.
Rate of premium 15% to 25% more than Standard Plus
Smoker Health Class Ratings
Preferred Tobacco
Someone who would have achieved a Preferred health rating will be driven to this class even with irregular use of tobacco products.
Standard Tobacco
This class is comparable to Standard health class but is a smoker. Their health is normal and they satisfy other criteria yet pay higher premiums.
Rates are 25% to 40% greater than Preferred Tobacco class
Table Ratings
People who fail to get health ratings are classified under the table ratings by insurance companies. They use various names like Table A or Table 1 but it means the same thing though the considerations may be different for each company. The applicants pay for the higher risk factor which may include health conditions like cancer, diabetes or other chronic health conditions.
Rate of Premium
The rate of premium is high and generally increases by 25% over the Standard class rate with each jump on the rating. For example, someone with Table A rating would pay premium rates of Standard class + 25% extra. Each downgrade adds up 25% which means someone with Table E pays Standard rate premium + 125% more.
Techniques used by Insurance Companies to provide Ratings
Qualify/Disqualify Approach
Some companies set health standards to provide ratings. For example, X insurance company is set 140/90 blood pressure without medication to qualify for Preferred Select class. But you get demoted to a lower class because you use medication or your blood pressure varies by even a certain degree. The factors taken into account to give ratings include things like blood pressure, cholesterol levels, family history, driving offences, tobacco or drug use, health conditions, etc.
Flexible Score Matching System
The more popular way of assessing involves a debit and credit system where an applicant is given scores based on each health reading. The total points are used to determine the health class. Someone with high blood pressure or cholesterol can be in Preferred Class if all other readings add up to give a high score. Many companies are lenient and neglect small differences in scores favoring applicants with higher classes.
Flat Extra Fee
Some life coverage companies require paying extra fees for non-health risk factors like hazardous occupation, dangerous hobbies etc. The amount of premium is based to calculate the extra charge.
Tips for Getting High Ratings
· Take care of your health and check weight, cholesterol, blood pressure and other dangers in control with diet, exercise or medication
· Smokers can stop smoking for a year and reapply as non-smokers
· Losing weight to qualify for a higher class. Half of the weight lost in last 12 months will be adjusted with your current weight while applying.
Disqualifying Factors
· Having the following can make applying for life coverage really difficult:
· Treatment for alcohol addiction in last 2 years and drug abuse in past 3 years
· Cases of heart attack in past 6 months
· Dementia, Alzheimer’s disease, HIV, lung diseases, radiation treatment of cancer, kidney diseases, current pregnancy complications
· Hospitalization due to psychological disorders in past 1 year
Contact us for a life coverage producer for the best advice on how to get a better health class and knowing different plans and policies.