The Role of Medical Ratings in Permanent Life Insurance Pricing (Substandard vs. Preferred)
The premium for any life insurance policy, including Whole Life, is heavily determined by the applicant’s medical risk classification (or “rating”). Understanding these classes explains why premiums can vary dramatically between two applicants of the same age and gender.
The Standard Risk Classes
- Preferred Plus/Preferred: The best rates, reserved for individuals in exceptional health with no family history of early death or serious disease.
- Standard Plus/Standard: Average rates, for those in good to average health with typical risk factors (e.g., slight overweight or controlled blood pressure).
Substandard Ratings (Table Ratings)
If an applicant has elevated health risks (e.g., controlled diabetes, past cancer), they may receive a **Substandard Rating** (often called a “Table Rating,” labeled as Table A, B, C, etc.). This means a percentage increase is added to the Standard rate, increasing the fixed premium of the Whole Life policy permanently. The higher the table letter, the higher the final premium.
Disclaimer: This content is for informational purposes only and is not financial or legal advice. An agent should always quote based on your most likely health class, not just the best possible class.