Preferred or Standard: How Life Insurance Classifications Influence Your Rates

Although the precise names vary from one manufacturer to the next, the following broad categories can be found:

• Super preferred nonsmoker: Applicants in good health who haven't smoked in at least five years may be placed in this category and receive the best available rates. Normal weight for height, normal blood pressure and cholesterol levels, and a clean medical history are required. In general, no parent or sibling may die from heart disease or cancer before the age of 60. Your driving record is also taken into account. If you've had a DUI conviction within the last five years, you won't be able to get into the top class. You will also be rejected if your license is suspended or if you have had more than two moving offenses or accidents in the last three years.

• Nonsmoker preferred: The second-best group is likewise connected with good health, albeit you will have a bit more freedom on blood pressure, cholesterol, and weight. Premature death of a parent or sibling due to cancer or heart disease is rarely acceptable. To qualify for these low prices, you don't have to look like a fitness model. For example, a 5-foot-10-inch male can weigh 129 to 210 pounds and a 5-foot-5-inch woman may weigh 102 to 178 pounds to qualify for “preferred” rates with AIG.

• Standard plus nonsmoker: This category is for nonsmokers who are usually healthy but do not meet the preferred category. Treatment for high blood pressure, for example, may be allowed as long as readings are within a normal range.

• The average individual falls into this category of nonsmokers. Being overweight or being treated for high blood pressure may be acceptable, as may the loss of one parent or sibling from heart disease or cancer before the age of 60.

• Preferred smoker: This group is for smokers who would normally be eligible for preferential pricing. Even if you have recently quit smoking, you may still be eligible for smoker rates. To qualify for the greatest nonsmoking rates, you must typically be a nonsmoker for at least five years, three years for the second-best prices, and one year for regular nonsmoker prices.

• Standard smoker: This group includes smokers who would otherwise fall into the standard nonsmoker group.

Omitted the' standard' cut

If you are a typical individual with a regular life expectancy, you will most likely be eligible for standard rates.

Some people may not qualify for normal rates due to medical issues such as diabetes, but they will still be able to obtain coverage. In such circumstances, the insurance provider provides a "table rating." Some businesses use numerals such as 1, 2, and 3, while others use letters such as A, B, and C. Each higher table rating normally adds 25% to the usual fee. A table rating of C, for example, denotes a standard rate + 75%.

A temporary additional fee, known as a "flat extra," may be imposed by an insurer from time to time. For example, a cancer survivor may be eligible for ordinary rates plus a $5 flat additional every $1,000 of coverage for five years. On a $500,000 policy, it translates to an additional $2,500 each year on top of the usual rate for the first five years.

How to Get Cheaper Life Insurance

Some factors, like as your family's medical history, are beyond your control, but you may make other adjustments to Reduce your life insurance prices.

Quitting smoking will provide you with the greatest bang for your dollars. For life insurance, smokers pay two to three times — or more — what nonsmokers pay. To qualify for nonsmoker pricing at most firms, you must abstain from cigarettes for at least a year.

Losing weight if you are overweight or obese will also help you qualify for lower rates — and can perhaps improve your blood pressure and cholesterol levels, which will also result in lower rates.

It is vital to shop around since life insurance costs vary greatly between companies.

A skilled independent agent can assist you in navigating the prices from various insurers, especially if you have a risk factor, such as a history of cancer, that makes it difficult to qualify for the best prices.