That’s a life insurance question that’s easy to quantify in numbers. At age 57 if I wanted $500,000 of 20 year term insurance and I qualified for the best rate class, preferred plus, I could expect to pay $1840 annually, about $161 a month. If for some reason I was qualified for the second best rate class, a preferred risk instead, the price would be $2160 a year, $189 a month.
So, we know there is a little more than $6000 at risk over the 20 year term depending on the rate class, so what is it that makes you preferred plus or preferred? For that let’s use a pretty middle of the road underwriting guide from North American Life.
For tobacco users, specifically those who smoke cigarettes, to qualify for preferred plus you have to have been a non smoker and not used any tobacco or nicotine products in the last 5 years. For preferred life insurance rates that period would be reduced to 3 years. So, if someone purchased life insurance after being a non smoker for 3 years, it would be worth shopping and possibly either replacing that policy when you get to 5 years or, if the company policy allows it, getting a rate reconsideration after you reach that 5 year mark.
Family history is a big factor. Generally companies want to know about your immediate family, mother, father and siblings and whether there has been any occurrence of or death from cardiovascular issues or coronary artery disease, or cancer. For preferred plus most companies require that there have not been any occurrences (even if they survived) prior to age 60. For preferred most companies drop siblings from the guideline and deaths prior to 60 are the benchmark rather than occurrences.
Blood pressure and cholesterol are two very common reasons for rate increases from preferred plus to preferred. For most companies, even if well controlled, being treated for blood pressure is enough to bump you one rate class. If not being treated there are thresholds that need to be met on the exam and with some companies also for the last two years in your medical records. An example would be for preferred plus they want an average of no more than 135/85. For preferred it would be higher, say 140/85.
Again, please keep in mind that these are North American Life guidelines and are middle of the road. Some companies are more liberal and some more conservative. It’s up to your agent to find the company that best fits your situation.
For cholesterol companies generally look at total cholesterol and the cholesterol ratio (total cholesterol/HDL). For preferred plus North American wants to see a total of no more than 220 with a ratio of no more than 4.5. For preferred the total can be 230 with a ratio of 5.5.
Other than the two minor forms of skin cancer, basal cell and squamous cell, any history of cancer will likely preclude preferred plus or preferred life insurance rates. The same is true of heart disease or cerebrovascular disease and diabetes. Any history of alcohol treatment would preclude preferred plus life insurance rates, while preferred rates would be considered after you are 10 years out from treatment.
Your driving record can affect your rate class with preferred plus requiring no more than one moving violation in the past three years and two violations being allowed for preferred. Airline pilots can qualify for preferred plus rates with full aviation coverage while private pilots would generally be eligible for preferred rates. The private pilot could qualify for preferred plus rates (with North American) but would have to accept an aviation exclusion rider.
There are obviously a lot more criteria or guidelines, but I’ll finish with build, your height and weight. North American is one of the few companies that differentiates between sexes in all rate classes. A lot of companies will have separate weights for men and women in the preferred plus life insurance rate class only and a lot of companies simply use a unisex chart, allowing the same build for men and women.
With North American for preferred plus a man 5’6 and 173# or a woman 5’6 and 161# would qualify. For preferred rates a man would need to be 179# and a woman would be 167#.
Bottom line. This is just a snapshot of the little things underwriters take into account when deciding if they are going to allow their best rate class for your policy. There is some unspoken fudge factor with some companies and some companies have written fudge factors such as Banner Life.