Call Today! 888-234-8376
How is ‘health class’ defined?
A health class is a category an insurance company puts you in based on your current health, which helps determine how much you’ll pay for life insurance. Each company has its own way to categorize people into health categories, which is a good reason to compare quotes from multiple life insurance companies.
Typically, you’ll see the following categories, ranging from best health/lowest premiums to lower health/higher premiums:
Preferred Plus: The “highest” category, with the lowest premiums. People in this category are typically fit, have a good BMI, have no family history of inheritable diseases, and don’t take on risky activities like rock climbing . . . or reckless driving.
Preferred: These people may be in pretty good shape, but they’re not Olympians. Someone in this class could be rocking a dad bod or have blood pressure that’s just a tad over what it should be. They probably also have good genetics (family history). These people will get almost the best rate for life insurance.
Standard Plus: No major health concerns, but these people may have more than one category that’s higher than it should be—blood pressure or weight, for instance. Family history is likely still good in this category as well. These people will get a better than average rate for life insurance.
Standard: These people have a few trouble spots in health combined with a not-so-spotless family history. However, overall health could still be considered about average. As such, they’ll pay a standard rate.
Substandard: People who aren't in good health or have health conditions like diabetes or a recent stroke fall into a broad category known as "substandard." There are quite a few subcategories in the substandard rating that take each health concern into consideration. Then if a policy is issued, it will likely be much more expensive than for people in average health.
Need help figuring out how you might be categorized? You can determine your health class rating with this guide.
What type of life insurance is best?
That depends entirely on you. There are many types of life insurance policies you can choose from based on your financial needs.
Term life insurance is generally best for people with short-term needs—to cover a mortgage or income while kids are still in the house, for example. It’s also best for people who want the cheapest life insurance option out there. And it’s best for people who need collateral for a business loan, such as an SBA loan.
Permanent life insurance, such as whole life or universal life, is best for people who want coverage that lasts their lifetime. Many people use it to leave a tax-free inheritance to their children. Others include permanent life insurance into their estate planning to help their children avoid ridiculously high taxes. Many others simply like it because of the savings component, called cash value, that grows tax-deferred and can be borrowed from. Permanent life insurance, however, is more expensive and a bit more complicated than term.
How much life insurance coverage do I need?
You can take a few approaches. Some people opt for 10 times their annual income. Some choose only the amount that’s on their mortgage. Then there’s the method of adding up debt, mortgage, education expenses for dependents, and years of income for a certain amount of years.
Before you choose your coverage amount, be aware that even stay-at-home parents are financially worth a lot to the family—even without an income. Think through how much childcare would cost in a stay-at-home parent’s absence. Consider the cost of meals, cleaning, or any other valuable contribution a stay-at-home parent makes to the household when selecting your coverage.
What if I have a medical condition?
If you have a medical condition, that doesn’t necessarily mean you won’t be accepted for a life insurance policy, but you may pay more for your coverage.
One alternative option is to apply for a no exam policy. These policies don’t require blood work and don’t require a physical, so that’s not taken into account when underwriting your policy. However, the insurance company may still ask questions based on your health, and depending on your conditions, they could still deny you a policy.
But if you are denied a policy, don't lose hope! Just because one company doesn't issue you a policy doesn't mean every company will deny you life insurance. Every insurance issuer has different standards for what medical conditions they tolerate, so keep trying.
If all else fails, there is always a guaranteed issue policy (also known as final expense) which doesn’t require any health questions and doesn’t deny anybody who can pay the premiums. While the death benefit won’t give your beneficiaries a windfall of cash, a guaranteed issue policy can help take care of burial expenses and perhaps a little extra. This is often a popular choice for seniors or older adults needing a life insurance policy.