Most people are familiar with the standard rate classes for life insurance. From the very best they usually go something like preferred plus, preferred, standard plus, standard. Different companies may call them something different, or only have three standard classes instead of four, but those four cover most of the companies and most standard underwriting situations.
When a health underwriting situation doesn’t fit into the standard categories most companies offer what is called table rated life insurance which in general is a percentage above standard for each table, usually 25%. For instance, a table 4 approval would be (4×25%) 100% above a standard rate. If a standard rate for a policy is $500 a year, it would double to $1000 a year. This system allows companies to approve rather than decline cases that don’t meet standard underwriting criteria.
In a perfect world all companies would use the same system so people could assume an apples for apples comparison between companies. It’s a competitive world out there though and it makes it impossible to compare life insurance table ratings. One company’s table 4 could be another’s table 2 and another’s table 5.
One of the things that makes it difficult to compare is the huge difference from company to company on their standard rate and what it takes to qualify for it. Just as an example, using a 50 year old buying $500,000 of 20 year term insurance, the best standard rate would be American General at $1739 annually. Some other representative standard rates are Banner Life at $1835, United of Omaha at $1937 and Prudential at $2150. These are four competitive impaired risk life insurance companies, the kind of companies you want handling your application if you’ve got serious enough health issues to be table rated. For instance a history of heart disease.
But here’s the kicker. American General table rates off of a “special” rate. It’s somewhere close to their standard plus rate but it’s a mystery rate. It ends up with them being the most competitive at any given table. Banner Life rates off of standard plus so they are the second most competitive. United of Omaha rates off of standard, but they have a lifestyle credit program that will allow you to pay the standard rate if you are rated at table 3 or better, so they can beat Banner and American General at a table 2 or 3. Prudential rates off of standard but they table rate at more than 30% per table which would make them the least competitive of the four if it wasn’t for the fact that they have often approved cases at preferred that are table rated by other companies.
Bottom line. Leave the ciphering up to your independent agent and just tell them you want the best price and best guarantees they can find. If you’ve been table rated and aren’t sure you got the best rate, call or email me directly and let’s see if we can improve your situation.