Life insurance is not one-size fits-all. Your life insurance needs are probably different than your neighbor’s. And guess what else? You will probably be in a different insurance risk class than them too.
Risk Classes are categories that life insurance carriers use to group people with similar health and lifestyle risks. Carriers create these classes by using data to determine which factors affect a person’s life span, and weighing how important each risk factor is.
Basically, the lower your risk of death, the better your risk class will be, with better risk classes meaning lower premium payments on policies.
These risk classes are typically organized as follows, though some carriers may use different names.
Risk ClassesFor Non-Tobacco UsersFor Tobacco UsersPreferred PlusPreferred TobaccoPreferredStandard PlusStandard TobaccoStandardTable Ratings
People in excellent health without any big risk factors for coverage will most likely end up rated at Preferred Plus, giving them the lowest possible premium payment. Those with health problems will often be approved at a higher risk class, meaning a higher cost of coverage.
Smokers and tobacco users have their own sets of prices due to the effect smoking has on a person’s health. For people who have quit smoking, the amount of time that has passed since you quit will determine which non-tobacco risk classes they are able to offer you.
The life insurance industry is extremely competitive, so the different companies allow flexibility on certain factors in order to get an edge on their competition and remain competitive. This is why when you run