Insurability in Life Insurance

Insurability in Life Insurance

Completing a life insurance application requires many answers to many questions. First, we determine and assess the need for life insurance. Then, we begin the application. The application starts off with basic demographics. These include name, address, phone number, etc.  Then, comes the health, medical history, and lifestyle questions.

Insurability and Basic Risk Classes

The first and easiest indicator of overall health is tobacco or non-tobacco user. The next indicator is body mass index. Height and weight ratio determine body mass index. So, generally, carriers classify health risks in at least three categories after tobacco or non-tobacco: standard, preferred, and super preferred. Specific names and qualifications for each class vary by carrier. The average person falls into standard. Think of anything better than standard as healthy or extra healthy. For someone who falls below standard, some carriers include table ratings. Table ratings cause increased premium due to higher risk of insurability. Generally, tobacco use and body mass index provide a good idea of potential risk class.

The Role of Health Questions in Determining Insurability

Many people wonder why so many medical history and health questions are on applications. Carriers use the answers to determine life expectancy. In theory, the better the overall health, the longer the life. Underwriters use data, statistics, and formulas to determine the proposed insured’s risk class. This risk class determines the cost to insure the person. This is how the risk class effects the premium.

Improving Insurability or Risk Class

The easiest factors to improve risk class include lowering body mass index and not smoking. Make regular visits with your doctor. Take medications as instructed. Improve overall health with healthier habits, such as drinking water, lowering sugar intake, and increasing fiber intake. Carriers often reassess in a couple years and issue a better policy due to better risk class.

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