What is a health classification?

In order to provide the most accurate premium quotes, life insurance companies need to have a way to predict the future health of those they insure. This type of calculation can be quite complicated, but in the end it means assigning life insurance applicants to one of several health classifications.

The best health classification – and the least expensive to insure – is known as preferred plus. After that comes preferred, standard plus and standard. The premiums for coverage are determined in part by these health classifications, and it is important for life insurance shoppers to understand these terms.

The health classifications used by life insurance companies are used to determine the relative level of risk – as the risk increases the life insurance rates typically go up as well.

Preferred plus health classification

Anyone who is in the market for life insurance should hope to be classified as preferred plus. That is because preferred plus is the top health classification used by life insurance companies – and it generally provides the lowest insurance premiums.

Unfortunately this highly sought-after health classification applies only to a small percentage of life insurance applicants, so most shoppers will end up with a lower health classification – and higher premiums.

Preferred health classification

Those insurance shoppers who do not qualify for the preferred plus health classification may still qualify for preferred coverage. While not as good as preferred plus, the preferred health classification is still better than standard or standard plus.

Since these health classifications are used to determine insurance premiums, getting qualified as preferred can result in significant savings.

Regular or standard health classification

While a small percentage of life insurance applicants will qualify for preferred or preferred plus coverage, most will be classified as regular or standard risks. This average classification will typically mean premiums that are higher than those afforded preferred plus or preferred health classifications.