What Is My Life Insurance Rate Class?
Your rate class is where the price gets real.
Preferred Plus, Preferred, Standard Plus, Standard and table ratings can produce dramatically different premiums for the same amount of life insurance.
See What Rate Class I May Qualify For →
QUICK ANSWER
A life insurance rate class is the pricing category an insurance company assigns to you after evaluating your health and other risk factors.
Generally, the better the rate class, the lower the premium.
But there is an important part of this that many consumers never hear:
Different insurance companies can put the same person in different rate classes.
That's why Big Lou doesn't just compare the prices shown on a quote screen. We try to determine which company's underwriting guidelines may fit you best.
The Big Lou Ratings Ladder
Think of life insurance pricing as a ladder.
Your position on that ladder helps determine what you pay.
The exact names and underwriting systems can vary by insurance company, but a common structure looks something like this:
Preferred Plus
Usually the most favorable traditional underwriting class and generally the lowest premium. Preferred Plus is typically reserved for applicants who meet a carrier's strongest health and risk criteria.
Preferred
Still a very favorable class, but generally allows somewhat more flexibility than Preferred Plus for certain health or risk factors.
Standard Plus
A common middle ground for applicants who are generally healthy but may have one or more factors that keep them from qualifying for a Preferred class.
Standard
Standard is another traditional underwriting class and can be a perfectly normal outcome for applicants with certain medications, medical conditions or other risk factors.
Table Ratings
Applicants whose risk falls outside a carrier's Standard guidelines may receive a table rating.
Many carriers commonly price table ratings in increments above their Standard premium. The exact system varies by insurance company.
Carriers may use letters, numbers or other systems to describe these ratings, so the terminology is not identical everywhere.
Why One Rung on the Ladder Can Matter So Much
The life insurance company is not simply deciding whether to approve you.
It is deciding where you belong on its pricing ladder.
Moving from Preferred Plus to Preferred may change the premium.
Moving from Preferred to Standard can change it again.
Moving from Standard into the table ratings can make the difference even larger.
Over a 20- or 30-year term policy, the underwriting class can matter a lot more than a few dollars difference between two companies' advertised Preferred Plus prices.
Rate Class Matters More Than the Quote You Saw Online
Suppose a website shows you a very attractive premium based on Preferred Plus.
That price may be completely legitimate.
But if your medical history ultimately qualifies for Standard instead, the Preferred Plus price was never really your price.
A cheap quote at the wrong rate class isn't necessarily a good quote.
That's what Big Lou calls a mythical rate: a real price attached to an underwriting class you may not realistically receive.
Learn more about Mythical Rates →
What Determines Your Life Insurance Rate Class?
Life insurance underwriting looks at much more than your age and whether you smoke.
Depending on the company, product and applicant, underwriting may consider factors such as:
- Age
- Height and weight
- Blood pressure
- Cholesterol
- Prescription medications
- Diabetes and A1C
- Sleep apnea
- Heart and vascular history
- Cancer history
- Kidney or liver function
- Mental health history
- Tobacco and nicotine use
- Family medical history
- Driving history
- Alcohol or substance history
- Avocations and other risk factors
No single item necessarily determines the result.
Underwriters often look at the entire risk profile.
Taking Medication Does Not Automatically Mean a Bad Rate
This is one of the reasons Big Lou says:
We're on meds too.
Underwriters generally care about more than the fact that you take a prescription.
They care about why you take it, how well the condition is controlled, whether your treatment is working and whether there are other related risk factors.
Being treated for a condition can tell a very different underwriting story than having the same condition untreated or poorly controlled.
Example: Type 2 Diabetes
Two people can both check the box marked “diabetes” and still look very different to a life insurance underwriter.
An insurer may look at:
- Current A1C
- How long you have had diabetes
- Age at diagnosis
- Medications
- Whether insulin is used
- Kidney function
- Blood pressure and cholesterol
- Weight
- Any diabetic complications
The word “diabetes” is only the beginning of the underwriting story.
Example: Sleep Apnea
Sleep apnea is another good example because the diagnosis by itself does not tell the entire story.
Severity, AHI, treatment, CPAP compliance, BMI and surrounding cardiovascular risk factors may all affect how an insurer views the case.
Learn more about life insurance with sleep apnea →
Example: Height and Weight
Life insurance companies commonly use build guidelines when evaluating height and weight.
But those guidelines are not necessarily identical from one carrier to another.
A build that affects your rate class with one company may be treated differently by another.
Same height. Same weight. Potentially different underwriting result.
Why Different Insurance Companies Can Give You Different Rate Classes
Every life insurance company manages risk differently.
Their underwriting manuals, product designs, reinsurance arrangements and risk appetites can differ.
As a result, one carrier may be more favorable than another for a particular health history.
This is why the cheapest company's Preferred Plus quote may not actually be the cheapest company for you.
The better carrier may be the one willing to put you in a more favorable underwriting class.
THE BIG LOU PRINCIPLE
We don't just shop prices. We shop underwriting.
Comparing prices is easy once you know the correct rate class.
The harder part is understanding which carrier may look most favorably at your actual health profile.
That's where experienced underwriting guidance can matter.
What If the Insurance Company Gives Me a Worse Rate Than Expected?
First, find out why.
Maybe a medical record contained information you didn't know was there.
Maybe a lab value was outside the carrier's preferred guidelines.
Maybe your build crossed that company's threshold.
Or maybe that particular carrier simply isn't the best fit for your health history.
An unfavorable offer does not automatically mean another company will do better.
But it can be worth understanding the reason before simply accepting the higher price.
That's when an underwriting second opinion can make sense.
Get an Underwriting Second Opinion →
What If I've Already Been Declined?
A decline is more serious than receiving a lower rate class, but the same basic principle applies:
Understand why the company declined you before deciding what to do next.
Depending on the reason, another carrier, additional medical information or simply waiting may be appropriate.
Learn what to do after a life insurance decline →
Can Big Lou Tell Me My Exact Rate Class Before I Apply?
No brokerage can guarantee the final underwriting decision before an insurance company reviews the application.
What we can do is ask the questions that matter, review the information you give us and use our experience with different carriers to estimate where you may realistically fit.
We'd rather give you a realistic expectation upfront than sell you on a rate we don't think you're likely to receive.
Frequently Asked Questions
What is the best life insurance rate class?
Preferred Plus is commonly one of the most favorable traditional underwriting classes, although terminology and class structures vary by insurance company and product.
Is Standard a bad life insurance rate?
Not necessarily. Standard is a normal underwriting class and can be a good outcome for many applicants depending on their health history and other risk factors.
What is a table rating in life insurance?
A table rating is a way insurers price applicants whose risk falls outside their Standard guidelines. The premium is increased above the Standard rate according to the carrier's rating system.
Can two life insurance companies give me different rate classes?
Yes. Carriers can have different underwriting guidelines and risk appetites, so the same applicant can potentially receive different underwriting outcomes from different companies.
Can taking medication affect my rate class?
It can, but the medication alone does not necessarily determine the result. The underlying condition, control, treatment history and other health factors can all matter.
Can my rate class change after I apply?
The rate class shown with an initial quote is generally an estimate or assumption. The final underwriting class is determined after the insurance company reviews the information required for your application.
Should I accept a higher rate if I'm already approved?
Do not cancel or give up an existing offer simply because you want another opinion. First understand why you received the rate you did and whether another carrier may realistically view the issue differently.
Find Out Where You May Fit on the Ratings Ladder
Tell Big Lou about your medications, health history and the coverage you're looking for. We'll help you understand which underwriting paths may make sense before you simply chase the lowest number on a quote screen.
See What Rate Class I May Qualify For →
Disclaimer: This page provides general educational information and is not a guarantee of eligibility, approval, rate class or premium. Underwriting classifications, terminology, guidelines and rating systems vary by insurance company, product, state and individual applicant.