Life Insurance Table Ratings, A Breakdown of How They Work

If you’ve been shopping around for life insurance plans, you may have run into one topic which can be confusing at first glance – life insurance table ratings. But don’t let these sometimes overwhelming looking charts stop you from getting the life insurance you and your family need.

Read on to learn about table ratings, how to understand them, and how they increase premiums.

What Exactly Are Life Insurance Table Ratings?

Table ratings are a way for life insurance companies to assess and weigh the risk associated with insuring you, if you are a Sub-Standard risk.

If you have, say, a dangerous job and/or a chronic medical condition, you are seen as a higher risk to insure, and, therefore, will have to pay a higher price for insurance.

For someone with diabetes, for example, an uncontrolled case may drop them to a Sub-Standard B.

The table ratings chart have a rate associated with each increased risk you are seen to have. Each different increase in risk  bumps you further down the table, and into a higher rate class.

Only term, universal and whole life get these types of ratings.

While most insurance companies rely on basic classifications, table ratings help make the process more specific. It also helps your insurance agent to immediately compare one carrier to the next, even though prices may vary.

For example, the basic Preferred rating typically includes people with above average health. These people present a minimal risk to insure.

The Standard rating usually includes people with more average health – like maybe who have some minor health concerns and are slightly overweight. This is what most people end up with.

While these categories are helpful for determining the rates many life insurance consumers will receive, they aren’t able to account for more complicated situations. Enter table ratings, which help provide more detail and assess risks which don’t necessarily fall into one of these categories.

What Causes Table Rated Approvals?

When applying for life insurance, you provide a detailed medical history, and answer questions about your health and lifestyle in the process. You will also undergo a medical exam which will involve laboratory tests like urine samples and blood tests.

Life insurance companies will then analyze the information gathered to get a detailed picture of your health and risks to your well-being.

Most insurance companies determine your risk by using a system called risk points. These points are assigned proportionally with each perceived increase in risk, depending on how severe the risk is thought to be in the long run.

For example, while having high blood pressure might result in just a few risk points, having a recent stroke on your record will mean a much more significant addition of risk points.

After your risk points are all added up, they will be used to determine your table rating, and thus, your cost for life insurance.

There are many issues which could factor in, but here are a few common ones:

• Body Mass Index
• Chronic medical conditions
• Previous medical events
• Mental health issues
• Family medical history
• Blood pressure and cholesterol levels
• Smoking status
• Risk associated with occupation
• Any criminal history
• History of driving under the influence

Making Sense of Table Ratings

Most table ratings are either assigned a letter or number grading system, depending on the company. A table rate of 1, or A, is on the lower end of the risk spectrum, while a rate of 5, or E, would be a higher risk. Here’s what it looks like:

Table Rating	Premium Increase
A	25%
B	50%
C	75%
D	100%
E	125%
F	150%
G	175%
H	200%
I	225%
J	250%

Each increasing table rate is associated with an additional percent increase in the monthly cost of life insurance coverage. This percentage of increase is based off of the Standard premium.

For example, the first tier of table rates (1 or A) will come with a 25% increase in cost for coverage. So if the base rate was $100, a person with a Table A rating would pay an extra $25, or a total of $125. And someone with a rate of E will see a 125% increase in cost – or pay $225 total for their monthly premium.

Shopping with Table Ratings in Mind

Although it may be disappointing to receive a table rating higher than you’d hope, the rates are actually a good thing. Without them, people considered higher risk would not be able to obtain coverage at all, or placed in a larger risk pool where everyone is forced to pay higher rates than they may need to otherwise.

With table ratings, insurers can assess your risk in a more detailed way. And yes, while you will pay a higher rate than someone with no history of medical issues, you’ll still be able to receive coverage and protect your family.

And the detailed approach of table ratings means many different factors are taken into account, which can work to your advantage.

For example, table ratings reduce the likelihood you’ll be automatically denied coverage because of your history of heart attack.

Thanks to table ratings and inclusion of your background information, you will end up with a lower monthly premium than you would otherwise.

Final Thoughts

It is also important to remember table ratings are not necessarily permanent. With many companies, you can have your risk reassessed after just a few years, or when you have new information to present them.

This potential for a future review is great if you would like to get life insurance coverage soon, but are currently recovering from a medical event or are in less than ideal health.

For example, maybe you can get your high blood pressure lowered or lose weight over time, show a return to stable health following a stroke, or show several years’ worth of well-managed diabetes following diagnosis. You might even qualify for reduced life insurance premiums.

Lastly, just because you receive a table rating of C from one company doesn’t mean you couldn’t easily end up with a rating of B from another. Different life insurance companies weight individual risks differently, so it is wise to do your research. We can help you do this.

Just make sure to do your research, provide all the information about your health as possible when applying, and to consider what exactly your personal life insurance needs and goals are.