Flat Extra: Life Insurance's Additional Cost Explained

A flat extra is an additional premium charged by life insurance underwriters on top of a standard life insurance rate. This premium is charged to those with medical conditions, dangerous hobbies or occupations, and represents the excess mortality risk. Flat extras are usually temporary, lasting five years or less, but can be permanent if the flat is for your occupation or avocation. The cost is indicated as a rate per $1,000 of coverage and can vary between companies.

Flat extras are additional premiums charged by life insurance underwriters

The duration of a flat extra premium can vary. For most medical conditions, it is temporary, lasting five years or less. However, if the flat extra is for your occupation or avocation, it may be permanent. Some companies may apply the flat extra rating for the entire life of the policy, while others may limit the rating for a specific period, such as 3, 5, or 10 years.

The impact of a flat extra on your life insurance premium can be significant. It often results in a much more dramatic increase in the premium compared to a table rating, which is a permanent rating assigned for certain conditions or risks. When faced with a flat extra, it is advisable to shop around and compare offers from multiple companies, as the rates and durations of flat extras can vary significantly between insurers.

It is important to note that not all life insurance companies apply flat extras in the same way. Some companies may be more flexible and willing to negotiate a lower flat extra or a shorter duration. Working with an independent life insurance agent or a broker who has relationships with multiple insurers can help you find the best possible offer and save money on your life insurance costs.

Flat extras are charged per $1,000 of coverage

A flat extra is an additional premium charged by life insurance underwriters that is added to a standard life insurance rate. This premium represents the excess mortality risk of your medical condition, occupation, or avocation. The cost is indicated as a rate per $1,000 of coverage. For example, a company may charge a flat extra of $7.50 per $1,000 of coverage. This means that for every $1,000 of coverage, the insured person will be charged an additional $7.50. This extra charge is on top of the normal premium and can cause a dramatic increase in the overall cost of the insurance.

Flat extras are usually assessed when an insured person has a medical condition or engages in risky activities that increase the likelihood of an insurance claim being made. These risky activities can include skydiving, scuba diving, aviation activities, drag racing, and race car driving. Flat extras may also be charged for certain occupations or avocations that are considered dangerous.

The duration of a flat extra can vary depending on the reason for the assessment. For medical conditions, flat extras are usually temporary and may last for a specified period, such as five years. However, for occupations or avocations, flat extras may be permanent for the entire life of the policy. It's important to note that not all life insurance companies use flat extras in the same way, and it is possible to shop around for a better rate or a shorter duration.

Flat extras are usually temporary but can be permanent

Flat extras are additional premiums charged by life insurance underwriters on top of a standard life insurance rate. They are usually applied to cover excess mortality risk due to an individual's medical condition, occupation, or avocation. For example, flat extras are commonly assigned for risky activities such as skydiving, scuba diving, aviation, and racing.

The duration of a flat extra can vary depending on the reason for its assessment. In most cases, flat extras are temporary and last for a specified period, such as 3, 5, or 10 years. This temporary nature allows for the additional risk to be covered during the specified time frame, after which the individual's risk profile may be reassessed.

However, flat extras can also be permanent in certain situations. For instance, if the flat extra is assessed due to an individual's occupation or avocation, it may be applied for the entire life of the policy. This means that the additional premium will be charged indefinitely as long as the policy remains in force.

The permanence of a flat extra can also depend on the insurance company's guidelines and underwriting practices. Different companies may have varying approaches to assessing and charging flat extras. While some companies may not charge a flat extra at all for certain risks, others may apply it permanently or for a limited period.

It is important to note that flat extras can significantly increase the premium amount. Therefore, it is advisable to shop around and compare offers from multiple insurance companies. By doing so, individuals can find the most favourable terms and potentially negotiate a lower flat extra or a shorter duration.

Flat extras are charged for risky activities

Flat extras are not used for heart conditions or GI conditions like Crohn's disease or ulcerative colitis, or other chronic health issues. On rare occasions, a flat may be used for a stroke victim. Most are temporary, lasting five years or less.

Flat extra ratings are most commonly assigned for risky activities. Every company has different underwriting guidelines, and while one may charge a flat extra of $7.50 per thousand of coverage, another may not have a flat extra at all. Some companies may apply the flat extra rating for the entire life of the policy, while others may limit the rating for a period of 3, 5, 10 years, etc. The only way to know you are getting the best possible offer is to have an independent life insurance agent shop your background with multiple companies.

Flat extras are usually assessed when an insured has had a recent sickness. That sickness is likely to have taken place within a certain time frame that the underwriter deems as still leading to extra risk. The issue with a flat extra, especially on a term life insurance policy, is that it increases the premium much more dramatically than a table rating.

Flat extras are charged for recent sickness

A flat extra is an additional premium charged by life insurance underwriters that is added to a standard life insurance rate. This premium represents the excess mortality risk of your medical condition, occupation, or avocation. Flat extras are charged for recent sickness, dangerous hobbies, or occupations. The sickness is likely to have taken place within a certain time frame that the underwriter deems as still leading to extra risk. The cost is indicated as a rate per $1,000 of coverage. It may be temporary for most medical conditions or permanent if the flat is for your occupation or avocation. Every company has different underwriting guidelines, and while one may charge a flat extra of $7.50 per thousand of coverage, another may not have a flat extra at all. Some companies may apply the flat extra rating for the entire life of the policy, while others may limit the rating for a period of 3, 5, or 10 years. Flat extras are not used for heart conditions or GI conditions like Crohn’s disease or ulcerative colitis, or other chronic health issues. On rare occasions, a flat may be used for a stroke victim. Most are temporary, lasting five years or less.

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