What Is The Rate Of Your Life Insurance Policy?
Life insurance companies provide a service and financial security for your family’s future. Part of what these companies must do to determine if you should be offered overage is weigh the risks imposed by your lifestyle, health, driving habits and other factors. Once the life insurance company has collected all the information needed and decided to offer you a coverage plan, they categorize you into one of four main rating categories.
Rated Life Insurance Policies
Rated life insurance policies are also referred to as a “substandard” policy. Those with a number of health challenges or who work in high-risk jobs are often granted a rated life insurance policy. This type of coverage will come with a higher premium, which is another reason to make sure you’re shopping the rates of different providers.
Life Insurance Classifications
The majority of life insurance providers have four rate classes.
Preferred Best: Only about 5 percent of applicants fall in this insurance category. Preferred best suggests you are within the recommended weight, take no medications, do not have a family history of health issues and have no major health complications in your own past.
Preferred: The preferred category is for those in excellent health with minor health issues easily treated with medication. You’re of a recommended weight and your family history may include cancer or other diseases. You may work in a dangerous occupation or be involved in “risky” sports.
Select (Standard Plus): Those with better than normal health but with minor wellness challenges fall into this category. You may be slightly overweight but have a clean family health history.
Standard: This is the most common health rating category with participants of average health and conditions that require multiple medications. You fall outside the recommended weight guidelines and have a family history of cancer or other diseases.
Choosing a life insurance policy can seem daunting, which makes working with an agent easier and faster. Your goal is to determine with provider offers the best rate for your rate class. With companies grading applicants based on different underwriting guidelines, the same coverage could cost more or less depending on the company.
What To Do If Given A Rated Life Insurance Policy
If you work with a life insurance agent, ask if it’s possible to get a better rate through a different provider. An experienced agent, as with Texas Republic Insurance Solutions, should be able to answer whether a better rate is achievable based on your application and feedback from companies. If a better rate is doable, it may take a little more paperwork, but the savings will be worth your time.
If you have other questions about life insurance, visit our FAQs page or contact us directly to see how are experienced team can help.
