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Do you want to save thousands of dollars on your life insurance policy?
You can with preferred rates.
Only people who live healthier and less risky lifestyles can qualify for these lower premiums. The discount on the premiums can be up to 30%, which could equal savings of thousands of dollars over the policy’s life.
Read on to see how you can get these premium savings.
What Is The Difference Between Standard And Preferred Life Insurance Rates?
When you apply for life insurance, you get standard non-smoker or standard smoker rates depending on your smoking status. But this is not the final premium that you pay.
That’s because this is the cost for the average person for your age and gender.
You don’t know your actual cost until you go through underwriting, where the insurance company obtains more information about your health and lifestyle.
After the underwriting process, the insurance company can place you in the risk category based on your personal information.
What is a standard rating for life insurance?
If you belong to this rating class, it means you’re at the same risk as the average person based on your age and gender. There are two standard rate classes: standard non-smoker and standard smoker.
What is a preferred risk in life insurance?
If you belong to this rate class, it means life insurance carriers consider you a lower risk than the average person. There are three categories: preferred plus (or elite) non-smokers, preferred non-smokers, and preferred smokers.
Preferred plus non-smokers: If you qualify for this rating class, it means you have excellent health and live a low-risk lifestyle. As a result, the insurance company rewards you with the best life insurance rate.
Preferred non-smokers: Although you’ll pay a bit more, you’re still healthier than the average person.
Preferred smokers: You may be a cigarette smoker, but that doesn’t mean you’re not in good health. Besides your smoking status, insurers classify you as the same risk as a preferred-non-smoker.
How can you qualify for preferred life insurance rates?
Insurance companies want to ensure that only those in excellent overall health who live a low-risk lifestyle can qualify for the best risk category.
Here are the factors that life insurance companies look at when determining if you can get the best rates.
Tobacco
You must not have used any tobacco or nicotine products in the past 24 months for elite non-smoker rates and 12 months for preferred non-smoker rates.
Any tobacco use within the past 12 months will drop you down to standard or preferred smoker rates.
Build
If you do not exceed the weight for your height, then you can get lower rates.
Life insurance companies have build tables for both preferred and elite, and male and female.
Here’s an example of a build table:
| Height (ft/in) | Maximum weight (lbs) |
|||
|---|---|---|---|---|
| Male | Female | |||
| Elite | Preferred | Elite | Preferred | |
| 4’8″ | 126 | 132 | 125 | 130 |
| 5’0″ | 145 | 151 | 142 | 148 |
| 5’4″ | 165 | 172 | 162 | 169 |
| 5’8″ | 186 | 194 | 183 | 191 |
| 6’0″ | 208 | 217 | 204 | 213 |
Blood pressure
The insurance company separates this into age brackets with a different maximum for systolic and diastolic pressure.
Also, you must never have taken medication for high blood pressure before.
Here’s a sample table:
| Age | Elite | Preferred |
|---|---|---|
| 18-34 | Does not exceed 125/75 | Does not exceed 130/80 |
| 35-44 | Does not exceed 130/75 | Does not exceed 135/75 |
| 45-54 | Does not exceed 135/80 | Does not exceed 140/85 |
| 55-64 | Does not exceed 140/80 | Does not exceed 145/85 |
| 65-70 | Does not exceed 140/85 | Does not exceed 150/90 |
| 71-85 | Does not exceed 145/90 | Does not exceed 155/90 |
Cholesterol level
Another factor that insurers look at is your total cholesterol level and cholesterol/HDL ratio.
To obtain a better price, you must never have been prescribed medication for high cholesterol levels before.
Here’s a sample cholesterol level table:
| Age | Elite | Preferred |
|---|---|---|
| 18-34 | Does not exceed 210/4.5 | Does not exceed 220/5.0 |
| 35-44 | Does not exceed 210/5.0 | Does not exceed 235/5.5 |
| 45-70 | Does not exceed 220/5.0 | Does not exceed 235/6.0 |
| 71-85 | Does not exceed 235/6.0 | Does not exceed 260/6.5 |
Family history
Because of the hereditary nature of diseases, family history plays an essential role in determining your premiums.
To obtain the best rating, your immediate family must not have had an instance of heart disease, cancer, or stroke before the age of 65. Immediate family refers to parents and siblings.
Medical history
When it comes to life insurance, your health history is vital to identifying your risk category. You must never have had cancer or heart disease or any other ratable health impairments to get a lower price.
Drug or alcohol abuse
No treatment for drug or alcohol abuse within the past five years to qualify for preferred rates. The best rates require no treatment in seven years.
Driving record
No impaired driving within the past five years and no more than two speeding violations in the last two years.
Criminal record
No conviction of any criminal offenses within the past five years.
Foreign travel
No travel to an excluded or rated destination.
Hazardous activities
No participation in any hazardous activities within the past two years. This includes (but is not limited to):
- Hang-gliding
- Skydiving
- Bungee jumping
- Motorized racing
- Backcountry skiing
- Scuba diving
- Mountaineering
Putting It All Together
Here is a table showing eligibility for the five underwriting classes:
| Class | Qualification |
|---|---|
| Elite non-smoker | No nicotine or tobacco products in the past 24 months. Do not exceed numbers listed under the elite section of build, blood pressure, or cholesterol level tables. No immediate family member was diagnosed with heart disease, cancer, or stroke before age 65. No personal history of heart disease, cancer, stroke, diabetes, or other ratable health impairments. No alcohol or drug abuse in the past 7 years. No impaired driving in the past 5 years. No conviction of a criminal offense in the past 5 years. No travel to rated or excluded destinations. Have not participated in dangerous hobbies in the past 2 years. |
| Preferred non-smoker | No nicotine or tobacco products in the past 12 months. Do not exceed numbers listed under the preferred section of build, blood pressure, or cholesterol level tables. No more than 1 immediate family member was diagnosed with heart disease, cancer, or stroke before age 65. No personal history of heart disease, cancer, stroke, diabetes, or other ratable health impairments. No alcohol or drug abuse in the past 5 years. No impaired driving in the past 5 years. No conviction of a criminal offense in the past 5 years. No travel to rated or excluded destinations. Have not participated in dangerous hobbies in the past 2 years. |
| Standard non-smoker | No nicotine or tobacco products in the past 12 months. No other qualification needed. |
| Preferred smoker | Have used nicotine or tobacco products in the past 12 months. Other criteria remains the same as preferred non-smoker class. |
| Standard smoker | Have used nicotine or tobacco products in the past 12 months. No other qualification needed. |
Qualifying for the elite rating class is the most difficult. Only low-risk people with optimum health and a clean medical history can get it.
Because of the strict criteria, only a tiny percentage of applicants qualify for the best life insurance rate. Instead, most people pay the standard rate on their life insurance policies.
Either way, if you can tell from the above that you can get one of the better rate classes, you might want to buy life insurance now and lock in your insurability.
You never know if a health issue will come up and make you ineligible for the lower rates. That’s why it’s never a bad idea to explore the option of life insurance even if there isn’t a current need.
Do you have to undergo a medical exam to get a better rate class?
Because some of the factors that the insurance company reviews include your blood pressure and cholesterol level, you will have to go through the medical exam to have a chance at the preferred categories. Life insurance companies pay for the exam, so you don’t have to worry about any additional costs.
Here are some tips on how you can get the best results on your medical exam.
Can you change your rating class on your current life insurance policy?
Yes! If you only qualified for standard rates when you first applied, but your health improved, you can apply to the insurance company to get your life insurance coverage re-rated. There’s no risk for you—your premiums can only go down, not up.
The insurance company will go through the entire underwriting process again to see if you qualify for a better health class.
How Much Does Term Life Insurance Cost For The Preferred Rate Class?
Now that you know how to get the best life insurance rate, you should know how much term life insurance costs compared to standard rates.
Here is a table showing the monthly premiums for $500,000 of term-20 life insurance coverage amount.
| Age and gender | Standard smoker | Preferred smoker | Standard non-smoker | Preferred non-smoker | Preferred plus non-smoker |
|---|---|---|---|---|---|
| Male, 25 | $55.80 | $51.30 | $31.50 | $30.15 | $26.10 |
| Female, 25 | $35.10 | $33.75 | $22.05 | $21.15 | $18.45 |
| Male, 30 | $62.10 | $54.45 | $31.95 | $30.60 | $26.55 |
| Female, 30 | $42.75 | $41.40 | $22.95 | $22.05 | $19.35 |
| Male, 35 | $85.85 | $70.65 | $33.30 | $31.95 | $27 |
| Female, 35 | $67.05 | $49.05 | $25.20 | $23.85 | $19.80 |
| Male, 40 | $138.15 | $101.25 | $48.60 | $45.90 | $36.90 |
| Female, 40 | $97.20 | $75.60 | $35.55 | $33.30 | $26.10 |
| Male, 45 | $225.45 | $164.25 | $77.40 | $72.45 | $58.05 |
| Female, 45 | $138.60 | $109.80 | $55.35 | $52.65 | $44.10 |
| Male, 50 | $358.20 | $275.85 | $130.50 | $122.40 | $98.55 |
| Female, 50 | $217.35 | $179.55 | $89.10 | $84.15 | $68.85 |
| Male, 55 | $594 | $483.75 | $230.40 | $217.35 | $178.20 |
| Female, 55 | $359.55 | $294.75 | $161.10 | $152.10 | $124.65 |
| Male, 60 | $925.65 | $799.20 | $435.15 | $408.15 | $327.15 |
| Female, 60 | $567 | $481.50 | $308.25 | $288 | $227.70 |
Have A Question? Talk To A Licensed Life Insurance Agent Today!
Getting a policy issued with a better rating can lead to savings of thousands of dollars over the policy’s life, so it pays to lead a healthy lifestyle when it comes to life insurance.
We know which life insurance companies are more lenient when it comes to qualifying for the lower rates, so we can help you get the best rates.
For more information and get customized term life insurance and whole life insurance quotes, contact us today.
Get Your Life Insurance Quote Now
While we make every effort to keep our site updated, please be aware that timely information on this page, such as quote estimates, or pertinent details about companies, may only be accurate as of its last edit day. Brian So Insurance and its representatives do not give legal or tax advice. Please consult your own legal or tax adviser. This post is a brief summary for indicative purposes only. It does not include all terms, conditions, limitations, exclusions, and other provisions of the policies described, some of which may be material to the policy selection. Please refer to the actual policy documents for complete details which can be provided upon request. In case of any discrepancy, the language in the actual policy documents will prevail. A.M. Best financial strength ratings displayed are not a warranty of a company’s financial strength and ability to meet its obligations to policyholders.
2 Comments
Hi Brian,
Does the preferred rate class applied to only Term life insurance?
Thank you.
Some permanent life insurance products have preferred rates too, although they are less common.