Oct 21
What’s a rate class?
When filling out your application for term life insurance on a comparison site, like AccuQuote.com, you may be asked what rate class you want to apply for. So what’s a rate class and how are you supposed to know yours? Easy. Your rate class is based on several health and lifestyle factors that may or may not affect your mortality. Life insurance companies use it to determine what your term life rate will be.
To ensure that you receive an accurate term life insurance quote, be sure to fill in the appropriate rate class. I’ve provided rate class descriptions below:
- Preferred Plus – In order to qualify for preferred plus rates you cannot use any tobacco and you must be in overall excellent health with no history of drug or alcohol abuse. In addition, you must not engage in hazardous activities.
- Preferred – Generally, to qualify for preferred rates you must be in excellent overall health and you must not participate in any hazardous activities.
- Standard – Standard risks refer to people who have had some minor health impairments. Examples of someone that would qualify for standard rates would include people who have elevated cholesterol levels or who are overweight.
- Substandard – This rate class encompasses people that have more than minor health problems. An additional charge will be added to these people’s premiums depending on the risk factors involved.
Keep in mind that underwriting guidelines vary among life insurance companies, but choose the rate class that you feel fits your health and lifestyle the best. Life insurance underwriters will decide if you fall under a different one. Who knows – you may qualify for a better rate class than you think.
For more information on how to determine your rate class, talk to a licensed life insurance professional at AccuQuote.com. They’ll conduct term life insurance comparisons at top-rated life insurance companies to ensure you get the best rate based on your individual information.
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October 22nd, 2009 at 10:25 am
Great look at rate classes! These make a huge difference in term life insurance rates. Even standard vs. preferred can change the rate by hundreds of dollars per year. Great post.
October 28th, 2009 at 11:04 am
I am actually surprised you don’t need to comply with the non-smoking requirement for “Preferred” class.
November 3rd, 2009 at 1:15 pm
Underwriting guidelines vary from one life insurance company to the next, so it’ best to talk to an agent before assuming you qualify for a certain rate class. In terms of smoking, your rate class depends on a number of factors such as, how often, what type, family history of lung disease, and if/when you quit using tobacco.