Health Classes: Understanding Life Insurance Rates Better

When applying for life insurance, you will be placed into a health class or risk class by the insurance company. This is based on your health, habits, medical records, and lifestyle choices. The class you are placed in will determine the premium you pay for your policy. The better your risk class, the lower your premiums will be. Insurance companies use different names for their health classes, but common names include Preferred Plus, Preferred, Standard Plus, and Standard.

How health classes work

A health class, or rate class, is a risk category an insurance company assigns you based on your health, habits, and medical records. Your health class is a key factor in determining the premium on your life insurance policy.

When you apply for life insurance, you will need to answer questions about your health, health history, family's health history, lifestyle, habits, and occupation. You will also be required to take a medical exam. The insurance company will use this information to project your mortality risk and decide which health class you fall into.

There are generally four to six health class categories:

• Preferred Plus/Best or Super Preferred
• Preferred
• Standard Plus
• Standard
• Table Ratings (Table 2, Table 3, etc.)
• Tobacco/Smoker Ratings

The specific requirements for each health class vary between insurance companies, but they generally follow similar guidelines. For example, to qualify for the Preferred Plus category, you must not have any serious health issues, be within the height and weight guidelines, and have no family history of diseases.

Your health class will depend on several factors, including your current health, tobacco use, family medical history, and lifestyle choices. It is important to note that qualification criteria vary among insurance companies, so it is common for individuals to qualify for different health classes at different insurance companies.

Factors that determine your health class

A health class, or rate class, is a risk category an insurance company assigns you based on your health, habits, and medical records. Your health class is a key factor in calculating how much you will pay for life insurance coverage. The better your health class, the lower your premiums will be.

Current Health

Your current health is one of the main factors that determine your health class. Insurance companies will typically require a medical exam as part of the life insurance application process. They will look at your height and weight, blood pressure, cholesterol levels, and any current or past medications. They will also consider any health treatments, surgeries, or chronic conditions you may have.

Lifestyle Choices

Your lifestyle choices and habits also play a significant role in determining your health class. This includes your smoking or tobacco use history, alcohol consumption, drug use, diet, and exercise habits. Insurance companies will also assess your driving record, occupation, and participation in any hazardous activities or recreational sports.

Family Medical History

Your family's medical history can also impact your health class. Insurance companies will consider whether there is a history of cardiovascular disease, cancer, diabetes, or other hereditary conditions in your family. They may also look at the age of onset and the cause of death of your family members.

Age and Sex

Your age and sex are also factors in determining your health class. Older individuals may be considered higher risk, and therefore placed in a higher-risk health class. Additionally, insurance companies may have different health class criteria for men and women.

While these are the main factors that determine your health class, it's important to note that insurance companies may have different specific criteria and requirements for each health class. It's always a good idea to shop around and compare quotes from multiple insurance companies, as the qualifications for each health class can vary.

Health class ratings

Life insurance health class ratings, or risk classes, are categories used by insurance companies to assess your health, lifestyle, and medical records to determine the premium on your life insurance policy. These ratings are based on factors such as your current health, age, medical history, and lifestyle choices. The insurance company will also consider your family's health history, your driving record, prescription history, and credit score.

There are generally four to six health class ratings, with some variation between insurance companies. The most common classes are:

• Preferred Plus/Best or Super Preferred Non-Smoker: This is the top-tier classification with the lowest premium rates. Applicants in this category typically have a clean bill of health and uneventful medical history. They do not use tobacco or nicotine products, have a healthy body mass index (BMI), and no history of serious illnesses.
• Preferred or Non-Tobacco/Non-Smoker Preferred: The second-best category with slightly higher premiums. Applicants may have one or two well-controlled minor health issues and a slightly higher BMI.
• Standard Plus or Non-Tobacco/Non-Smoker Standard: The third-best category with higher premiums. Applicants may have well-controlled mild-to-moderate health conditions and a higher BMI.
• Standard: The fourth-best category with the highest premiums among the main four classes. Applicants may have multiple well-controlled moderate health conditions, chronic health conditions, or mental health issues.

In addition to these main classes, there are also substandard or table-rated categories for individuals with more serious health issues or who do not fit into the standard categories. These ratings are typically more expensive and are based on specific health conditions or lifestyle factors.

It is important to note that insurance companies may have different names and specific requirements for each health class rating. The above information provides a general overview of the health class ratings used in the life insurance industry.

How to get a better health class

A health class is a risk category that an insurance company assigns to you based on your health, habits, and medical records. Your health class is a key factor in determining the premium on your life insurance policy.

Apply Early

The average cost of life insurance increases by 4.5 to 9% every year, so it's best to apply as early as possible. The younger you are when you apply, the more you'll save.

Address Any Health Issues

Get any health conditions under control or resolved. For example, if you have high cholesterol, try to manage it through diet or medication. This could help you qualify for Preferred rates.

Quit Smoking

If you're a tobacco user, quitting will significantly impact your health rating and premiums. You'll need to be tobacco-free for at least 12 months to five years, depending on the insurer, to qualify for non-smoker rates.

Maintain a Healthy Weight

Keep your body mass index (BMI) within the recommended range. Your weight should be considered healthy for your height.

Keep a Clean Driving Record

Avoid reckless driving and driving offenses. A clean driving record will help keep your premiums low.

Avoid High-Risk Activities

Participating in high-risk activities, such as snowboarding or skydiving, will likely result in higher insurance premiums.

Choose the Right Insurer

Different insurers have different criteria for determining health classes. Shop around and compare insurance quotes to find an insurer that best suits your health profile and offers the most favourable rates.

Health class and insurance rates

When applying for life insurance, you will be placed into a health class or risk class by the insurance company. This is a risk category based on your health, habits, and medical records. Your health class is a key factor in determining the premium on your life insurance policy.

Insurance companies use health classes to determine your eligibility for a life insurance policy and your premiums. The process of health-risk classifications protects insurance providers by letting them charge premiums that match the level of risk. If the insurer thinks you are likely to die sooner than your peers, you’ll be placed into a higher-risk health class and pay more for a life insurance policy. If the insurer considers you a low risk, you’ll be in a lower-risk class, and you’ll likely be approved at a relatively low premium for your age group.

The specific names for various health classes vary between insurance companies, as do their requirements. However, common health class names and categories include:

• Preferred plus or super preferred nonsmoker
• Preferred or preferred best
• Standard plus nonsmoker
• Standard
• Table ratings or substandard classes

Insurance companies generally use four to six health classifications to determine your premiums. The exact health class you are placed in will depend on several factors, including your current health, tobacco use, family medical history, and lifestyle.

Frequently asked questions