Health Classification in Life Insurance Policies

+To provide more accurate premium quotes, life insurance providers need to determine the future health of the people they insure. The calculations behind this process can be quite complicated, but the bottom line is that they assign insurance applicants to one of several health classifications. So what does a health classification mean and what’s involved?

Here’s how it works: In order to assign a health classification to an applicant, he or she will first be made to undergo a medical exam. Once completed, the insurance provider will then review the results, including the information provided on the application as part of the provider’s underwriting process. Factors that determine an applicant’s health classification include personal health, family history, lifestyle, weight, height, age, and participation in extreme activities. 

Health classification terms vary from one insurance provider to another, but they can generally be categorized as preferred plus, preferred, and standard. Applicants in excellent health and not considered high risk are usually assigned a preferred plus classification. Smokers and those with health issues, on the other hand, are usually given a standard classification or worse are rated (meaning rates are more than standard rates) or declined. 

Your health classification will determine the policy options and premiums that will be made available to you. A standard classification usually means you’ll need to pay higher premiums than those with preferred or preferred plus classifications. You won’t know until you go through the approval process, this starts by applying for life insurance.