The Life Insurance Application Process

When you begin the life insurance application, the insurance company will review medical, non-medical and financial risk factors about yourself and your lifestyle. You could be asked to take a blood test, have your Physician provide a statement, and review your past and current medical prescriptions. Some life insurance companies conduct phone interviews to gain more insight into your family health history and/or to ask you additional questions.

How do insurers determine risk class category?

There are several tools insurance carriers use to help determine an applicant’s risk class.

• Medical exam  The underwriting process for most life insurance policies includes a medical exam, which might collect height, weight, blood pressure as well as blood and urine samples. This information will be used to assess your risk class.
• Life insurance application  The application provides critical information about your history, lifestyle and situation that also contributes to determining your risk class.
• Family medical history  Apart from your medical exam, the insurance carrier will likely provide a questionnaire requesting information about your family medical history. This is important information determining your risk and policy rate.

There is NO medical exam life insurance in the marketplace. However, these policies may be more expensive than policies that require medical exams and also limit coverage.

What questions will insurance carriers ask for insurance risk ratings? 

The number and types of questions posed by carriers during the insurance underwriting process may seem extensive, but the information may be used to help determine your risk class.  Once this information has been processed, the life insurance company underwriter will determine what risk category you fall in based on characteristics such as your age, occupation, family health history and overall health status. These findings will place you in a rating class that will determine your premiums. While the names for specific life insurance company rating categories may differ between companies, the classifications are: preferred select, preferred, non-tobacco, preferred tobacco and standard tobacco.

What is the difference in the risk class categories?

It is important to note that not all insurance companies follow the same rating criteria. Therefore, you could be rated as “preferred select" by one company and “preferred" by another, simply because of that company's individual underwriting guidelines.

Know that if you are a smoker, or a habitual user of products containing nicotine, your health class and final rate quote will likely be affected when you apply. For some insurance carriers, smoking includes e-cigarettes in addition to regular cigarettes or use of chewing tobacco.

Preferred select rating

A preferred select rating is typically assigned if you are in excellent health, fall into a normal height-to-weight ratio and have a favorable family health history. You might, for example, have no immediate family members who have died from cancer or heart disease at an early age. There may also be other non-medical criteria involved, but these are typically the basics for qualifying for a select rating. Some life insurance carriers may have higher ratings, such as super select.

Preferred rating

A preferred rating is also associated with optimum health. However, this rating implies there could be certain factors that may indicate you pose a slightly higher risk than someone who would qualify for a preferred select rating. This can be attributed to a number of different factors and depends on how the insurance company differentiates between a select and preferred rating, depending on the insurer.

Non-tobacco rating

A non-tobacco rating is typically associated with the average applicant, which includes nonsmokers and can include those who smoke occasionally or participate in minimal tobacco use. For example, if you smoke the occasional cigar, you might receive a non-tobacco rating, depending on the insurer.

Preferred tobacco rating

A preferred tobacco rating usually means that you would have an optimal rating if you didn't use tobacco products. Even if you don't have a family history of heart disease or lung cancer, for example, you will still receive the tobacco designation because you are a smoker.

Standard tobacco rating

A standard tobacco rating typically signifies that you are a tobacco user who does not meet the preferred rating guidelines, but are in otherwise relatively good health. You might have a big risk factor like high blood pressure but still have a favorable family medical history.

There are many factors that determine your life insurance premiums. They include the types of insurance, the amount, length of coverage, as well as your risk rating. As shown above, if you use tobacco products, your premium rates will consider all the risks associated with being a smoker.

The most important thing to remember is to be sure to inquire with the insurance carrier about the different risk classes.

• What is your current age?
• Are you a smoker?
• What was your parents' or grandparents' cause of death?
• Do you participate in any sports, hobbies or high-risk activities?
• What is your driving record like?
• Do you currently or have you previously taken any medicines?

Please contact us at Dtown Insurance if you would like to discuss life insurance options - 215-345-1796