How Your Life Insurance Premium Is Calculated

Insurance companies never take risks when setting the rates that you will pay for an insurance policy. They try to ensure that you won’t die unexpectedly because they do not want to pay more than you paid in do.

Risk Factors…
Insurers especially scrutinize whether you suffer from any of the risk factors such as smoking tobacco, cholesterol levels, obesity, diabetes, and other conditions that could lead to poor health and a quicker death. If you or your family have a history of cancer the company will weigh the possibility of your cancer returning or a cancer diagnosis based on your family history.

After they estimate the potential of these risks, insurers will designate your status (using a title such as preferred or standard) based on age, gender and health, and this status determines the amount that you will be required to pay for your life insurance.

To determine your health status, you will have to give your medical history and undergo a physical exam. Make sure to fill accurate details in the health questionnaire. If you furnish them with incorrect information insurance company could cancel your insurance policy. Or if you hid the fact that you are a chain smoker until you’re diagnosed you’re dying of lung cancer, the insurance company is likely to deny the death benefits of your insurance policy

However risk factors such as gender or age cannot be controlled. Women generally have a longer life than men, so women have lower rates on life insurance and men pay a lower rate on an annuity. As regards the age factor, younger people will pay insurance premiums for a longer period till they are likely to die but because they are healthier, pay a lower rate than an aged person is. Your family medical history and lifestyle can play a major role in maintaining or ruining your physical condition.

A doctor chosen and paid for by the insurance company will take your physical exam. He will check your weight, blood pressure and other vital signs. X-ray or EKG, blood and urine samples will be taken and tested for any sign of disease, especially for HIV virus, cholesterol level, and for any indications of diabetes, kidney problems, hepatitis and other problems. Samples can also tell of nicotine content, medications and also whether illegal drugs being taken.

How To Insurance Companies Set The Rates?
Depending on the condition of your health and calculated risk of other factors that can be controlled every insurance company decides whether you are a preferred-plus, substandard buyer or any category in between. Then determine level term life insurance quotes accordingly. Inform you’re agent if you have any of the risk factors when discussing your life insurance policies as he will know what rates are being charged by insurers for specific risks, and is capable of finding an insurance company that doesn’t hike premiums for a particular condition. If it’s a controllable risk factor, you should try to prevent and eliminate it. Quit smoking. Lose some weight. Take your blood pressure medication regularly. As your health improves give proof of this to the insurance company to try and lower your rates because an insurance company will never increase the insurance premium, but can definitely decrease it.

Determine Your Health Class Rating

What sets us apart?…The Spectrum Insurance Group Quote Difference:

A professional insurance representative will consult with you and help you determine a precise rate class.

Your premium payment for a life insurance policy is determined by your health class rating. Rate classifications are as followed, preferred,preferred plus,standard(regular),standard plus (or regular plus), and then a “rated” health class. The rated health has many different tables. To determine which table rating you will be placed in you need to consult with a life insurance agent for an accurate quote.

The Chart below provides detailed requirements to assist you in defining your appropriate health class rating. Typically each requirement must be accurate in order to qualify for the defined health class.

Preferred Plus Preferred Regular
Height & Weight
maximum height/weight
maximum height/weight maximum height/weight
Tobacco Use No tobacco use in the past 3-5 years
(varies by company)
No tobacco use in the past 1-3 years
(varies by company)
No tobacco use in the past year
(only for non-smoker)
Blood Pressure 140/90 without medication 140/90 with medication
150/90 without medication
150/90 with medication
155/95 if age 41-60
160/95 if age 61 or higher
Cholesterol 230 without medication
HDL ratio under 5.0
250 with or without medication
HDL ratio under 7.0
300 with or without medication
HDL ratio under 8.0
Driving Record No more than 2 moving violations in the past 3 years
No DUI/reckless driving in past 5 years
No more than 2 moving violations in the past 2 years
No DUI/reckless driving in past 5 years
No more than 2 moving violations in the past 1 year
No DUI/reckless driving in past 2 years
Family history No parents or siblings diagnosed with heart disease/cancer before age 60 No parents or siblings died of heart disease/cancer before age 60 Not applicable
Citizenship US Resident for past 3 years (or permanent visa/green card) US Resident for past 3 years (or permanent visa/green card) US Resident for past 3 years (or permanent visa/green card)

If you have been treated for any of the ailments on the following chart, you’ll find a dot corresponding to the best rate class for which you’re most likely to qualify. Treatment received for two or more of the problems listed below may classify you for a higher rate class, or it may cause you to be declined for life insurance.

Asthma (allergy)


Preferred Plus Preferred Regular Non-Regular
Alcohol/Substance abuse
Arthritis (Osteo)
Arthritis (Rheumatoid)
Asthma (steroid meds)
Cancer (basal cell)
Cancer (not basal cell)
Cardiovascular/Heart Disease
Crohn’s Disease
Depression (situational)
Depression (on-going)
Hepatitis A or B
Hepatitis C
Kidney/Liver Disease
Mental Illness
Mitral Valve Prolapse
Multiple Sclerosis
Ulcerative Colitis
Vascular Disease