Life Insurance Underwriting Health Classes Defined

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Life Insurance Underwriting Health Classes Defined Life insurance policy underwriting is the process insurance companies use to review an individual’s health history, avocations and lifestyle factors to determine their actual risk of mortality. The goal of life insurance underwriting is to accurately assess an individual’s risk level for the purposes of assigning the appropriate rate for life insurance. Each company has their own underwriting guidelines for categorizing an individual’s health class. Life insurance rates are based on the actual underwriting health class as determined by the underwriting process. Most insurance companies have up to six published underwriting health classes* including:

  1. Preferred Plus Non-Smoker (Best Health Class) – Approximately the top 20% of the population will qualify for the preferred plus health class. See general preferred plus underwriting guidelines.
  2. Preferred Non-Smoker (2nd Best Health Class) – The preferred health class includes the next 20-25% population. In other words, as a general rule, the top 45% of the population will qualify for at least a preferred rate class. See general preferred non-smoker underwriting guidelines.
  3. Standard Plus Non-Smoker (3rd Best Class) – The standard plus or super standard underwriting class includes everyone that is in better than average health that cannot otherwise qualify for preferred rates. See general standard plus underwriting guidelines.
  4. Standard Non-Smoker (Average Health Class) – The standard nonsmoker health class includes everyone in “average” health. Individuals qualifying in the standard rate class may take a few medications or simply be 20 pounds overweight. These individuals are not in bad health, they simply do not meet the requirements for preferred rates.
  5. Preferred Smoker (Best Smoker Class)– The preferred smoker underwriting class includes individuals that meet the guidelines above for the preferred non smoker health class but use cigarettes or other tobacco related products. Click here for possible opportunities for better rates for those who use alternate forms of tobacco other than cigarettes.
  6. Standard Smoker– The standard smoker health class includes everyone that smokes and otherwise meets the guidelines for standard non smoker rates.

* Most individuals will qualify for one of the health classes above. However, there are about 10-15% of the population with medical problems and will therefore be considered substandard risks. These individuals will be charged a higher rate due to their health conditions. Additionally, there is a small percentage of individuals that are uninsurable or will be declined for life insurance because of their past health histories. Because each life insurance company has its own underwriting criteria, it is very possible for one company to approve you at preferred non-smoker rates when there are other companies that may offer only standard rates. The key to getting the best life insurance rate is to know which insurance company has the underwriting guidelines that are most favorable based on your specific health circumstances. Having an experience independent insurance agent that is knowledgeable on underwriting guideline differences as well as potential underwriting niches is critical to getting the best rate.

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