Preferred Plus (Super Preferred)

Best risk class:
- Excellent health: No health issues
- Optimal build: Ideal height/weight
- Non-smoker: Never smoked or quit 5+ years
- Good family history: No early deaths from heart disease/cancer
- No hazardous activities: Safe occupation and hobbies
- Excellent labs: Blood pressure, cholesterol, glucose all optimal

Premium: Lowest rates (30-40% below standard)

Preferred

Very good health:
- Good health: Minor issues controlled
- Good build: Slightly overweight acceptable
- Non-smoker: Required
- Controlled conditions: Minor issues (e.g., controlled hypertension)

Premium: 10-20% below standard

Standard

Average risk:
- Average health: Typical person
- Minor issues: Controlled conditions
- May be smoker: Separated into smoker/non-smoker rates
- Normal build: Slightly above/below ideal

Premium: 100% of standard rate

Example rates (40-year-old male, $500K):

Preferred Plus Non-Smoker: $500/year
Preferred Non-Smoker: $650/year
Standard Non-Smoker: $800/year
Standard Smoker: $1,800/year

Table Ratings

Percentage increase above standard:

Letter or number system:

Standard: 100% (A or 1)
Table B (2): 125%
Table C (3): 150%
Table D (4): 175%
Table E (5): 200%
Table F (6): 225%
Table G (7): 250%
Table H (8): 275%
Table J (9): 300%

(Note: Skip letter "I" to avoid confusion with number "1")

Example calculation:

Standard premium: $1,000/year
Table D rating (175%):
$1,000 × 175% = $1,750/year

Increase: $750/year

Flat Extra Premium

Additional dollars per $1,000 of coverage:

Used for:
- Hazardous occupations
- Dangerous hobbies
- Temporary risks

Calculation:

Standard premium: $1,000
Flat extra: $5 per $1,000
Face amount: $500,000

Flat extra cost:
($500,000 ÷ $1,000) × $5 = 500 × $5 = $2,500

Total premium: $1,000 + $2,500 = $3,500

Temporary flat extra:
- Applied for 5-10 years
- Then removed
- For conditions expected to improve

Example:

Recent surgery, full recovery expected
$3 per $1,000 for 5 years
Then standard rates

Year 1-5: Standard + $1,500 flat extra
Year 6+: Standard only

Combination Rating

Table rating + flat extra:

Example:

Applicant: Controlled diabetes + commercial pilot

Diabetes: Table C rating (150%)
Aviation: $4 per $1,000 flat extra

Standard premium: $1,000
Face amount: $250,000

Table C: $1,000 × 150% = $1,500
Flat extra: ($250,000 ÷ $1,000) × $4 = $1,000

Total: $1,500 + $1,000 = $2,500/year

Age

Older = higher premium:
- Mortality increases with age
- Premium doubles roughly every 10-15 years

Gender

Females live longer:
- Lower premiums (10-20% less)
- Better mortality experience

Smoking Status

Smokers pay 2-3× more:

Non-smoker: $800/year
Smoker: $1,800/year (225% more)

Quit requirements:
- 12 months nicotine-free minimum
- 3-5 years for best rates

Health/Medical History

Impact varies:
- Well-controlled conditions: Standard to slight rating
- Uncontrolled: Substantial rating or declined

Build (BMI)

Obesity ratings:

BMI 27-29: Standard
BMI 30-34: Table B-C
BMI 35-39: Table D-F
BMI 40+: Declined

Family History

Early deaths matter:
- Parent died before 60 of heart disease/cancer
- May prevent preferred class
- Usually doesn't cause rating

Occupation

Hazardous jobs:

Office worker: Standard
Commercial pilot: Standard to slight rating
Test pilot: Substantial rating
Underground miner: Rated or declined

Avocations (Hobbies)

Dangerous activities:

Recreational scuba: Standard
Skydiving: Flat extra or exclusion
Racing: Flat extra or declined
BASE jumping: Declined

Reasons for decline:
- Terminal illness
- Recent heart attack/stroke
- Uncontrolled severe conditions
- Substance abuse
- Extreme obesity (BMI 45+)
- Moral hazard

Adverse action notice:
- Must notify applicant
- Provide reason
- FCRA requirements
- Right to see reports

Separate rate classes:

Non-smoker qualifications:
- No nicotine products 12+ months
- No cigarettes, cigars, pipes, chewing tobacco
- No vaping (most companies)

Smoker rates:
- All tobacco users
- Marijuana users (some companies)
- Recent quitters (< 12 months)

Rate differential:

Typical impact:
Non-smoker: $800/year
Smoker: $1,800/year

Difference: 125% more

Some states require:
- Montana requires unisex rates
- Same premium regardless of gender
- Average of male/female rates

Level premiums:
- Whole life: Guaranteed level for life
- Term: Level for term period
- UL: Depends on interest/COI

Annual renewable term:
- Increases each year
- Based on attained age

• Risk classes: Preferred Plus, Preferred, Standard, Substandard, Declined
• Preferred Plus: Best class - excellent health, non-smoker, optimal build
• Standard: Average risk, 100% of standard premium
• Table rating: Percentage increase (B=125%, C=150%, D=175%, etc.)
• Flat extra: Additional $ per $1,000 of coverage
• Temporary flat extra: Applied for 5-10 years, then removed
• Combination rating: Table rating + flat extra
• Smoker rates: 2-3× higher than non-smoker
• Non-smoker qualification: 12+ months nicotine-free
• Age factor: Premium increases with age
• Gender: Females pay less (better mortality)
• BMI impact: Obesity rated (BMI 30+ typically rated)
• Declined: Terminal illness, severe uncontrolled conditions
• FCRA: Adverse action notice required when declined