Health Risk Classifications in the Insured Loans and Term Life Insurance Market

Preferred Plus refers to individuals who are in good health. If an individual qualifies for Preferred Plus, they typically pay the least amount of money. In this case, the person may also be eligible for an excellent credit rating. Individuals with a poor credit rating or poor health may qualify for Standard or Variable Rate (VR) if they take medication every month.

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The age of the individual determines Standard or Non-Preferred risk classifications. The younger the individual, the lower their premiums. Conversely, older people tend to have higher premiums because they are more likely to pass on sooner. The underwriting process used for Standard or Non-Preferred risk classifications involves medical and demographic information. Actuarial tables present mortality figures for Standard or Non-Preferred risk classification.

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High risk refers to individuals who smoke cigarettes or have other health issues. Individuals classified as high risk will pay more money than others for the same type of coverage. The high-risk category also includes anyone who has had a stroke, heart attack, diabetes, or another health issue. Individuals who smoke cigarettes are considered a higher risk, and this is reflected in their higher premiums.

Person Type: A person type refers to factors that affect premiums for each health insurance policy. If an individual smokes, their premium will be higher than a person who does not smoke. Similarly, a person who has had a history of cancer will be charged a higher risk class than someone who has never had cancer.

Multiple Medications: Most insurance companies require individuals to choose a substandard risk classification if they take multiple medications. Substandard risk classifications include individuals who are diagnosed with cancer, heart disease, hypertension, asthma, diabetes, depression, Parkinson's disease, chronic obstructive pulmonary disease, or other chronic respiratory illnesses. Individuals who choose to enter into a substandard risk category are advised to undergo additional examinations and screenings, and undergo random drug testing. These steps help to ensure that the risks of these substandard risks are not underestimated. If an individual chooses to enter into a multiple medications category, they will need to be re-evaluated for eligibility. If determined eligible, their premiums will usually be lower.

Preferred Plus: An individual usually selects preferred classifications based on factors such as age, gender, weight, smoking, and other health-related characteristics. The premiums tend to be higher in this category than in different risk classes. Usually, a Preferred Plus risk will have the lowest standard rates available for that risk category. Once a Preferred Plus risk is chosen, however, the individual may qualify for additional discounts.

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Standard Rate Classifications are also available, which are adjusted to provide the lowest standard rate for each individual. These premiums are based on the same criteria as Preferred Plus premiums but do not include all of the options that Preferred Plus holds. These premiums do, however, have the highest discount rates available to all consumers.

One additional risk classification is called Minimum Service Level (MOL) risk classifications. Insurance companies use MOL ratings to determine how much coverage is necessary for an individual. The rating system begins with an "A" rating, which represents excellent to great coverage. As the rating gets closer to, or maintains the "A," the premium increases to give the consumer the coverage level that they need.

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One of the largest categories in the MOL risk groupings is Type II diabetes. This is a chronic health issue, which means that people who suffer from Type II diabetes cannot control their body's blood sugar levels. Unlike most other types of risk categories, the cost of Type II diabetes insurance does not fluctuate based on an individual's lifestyle or overall health. An individual who suffers from Type II diabetes can qualify for an insurance policy at any age.

Finding an insurance risk class that best fits your health and financial needs can take some research. Understanding the different risk categories and what they can do for you is the first step. When an insurance company underwrites a new policy, they will consider your risk factors in determining your new premium. Being aware of the factors that will influence your rate will help you choose the best insurance risk class for you. Unsure of your risk class? Contact a Plentii agent today!