Life Insurance Underwriting Process and Health Classes

Life insurance underwriting determines your health classification and premium rate. Understanding this process helps you set realistic expectations, prepare properly, and potentially qualify for better rates.

What Is Underwriting?

Underwriting is the insurer's evaluation process to assess your mortality risk. The insurer reviews your health, lifestyle, occupation, and other factors to determine whether to offer coverage and at what price.

Health Classifications Explained

Insurers group applicants into rate classes based on risk assessment. Classifications vary by company, but most use these standard tiers:

Preferred Plus (Super Preferred)

The best available rates, reserved for applicants in excellent health.

Typical requirements:

• No tobacco use for 5+ years
• BMI between 18-27
• Blood pressure below 130/85 without medication
• Cholesterol below 220, favorable HDL/LDL ratio
• No family history of heart disease, stroke, or cancer before age 60
• No hazardous hobbies or occupations
• Clean driving record (no DUI, minimal violations)

Preferred

Very good rates for healthy individuals with minor imperfections.

Typical requirements:

• No tobacco use for 3-5 years
• BMI between 18-30
• Blood pressure below 140/90 (may allow well-controlled medication)
• Cholesterol below 250
• Limited family history concerns
• Generally healthy lifestyle

Standard Plus

Above-average health but with some factors preventing Preferred classification.

Typical requirements:

• No tobacco use for 1-3 years
• BMI between 18-32
• Controlled health conditions
• Some family history of disease
• Minor health concerns that are well-managed

Standard

Average health, baseline rates that all other classes are compared against.

Typical qualifications:

• May include recent former tobacco users
• BMI up to 35
• Controlled chronic conditions
• Family history of early disease
• Minor health issues

Substandard (Table Rated)

Higher-than-standard rates for applicants with significant health concerns. Substandard ratings use a table system (Table A through Table P or Table 1 through Table 16).

Each table rating adds 25% to the standard premium:

• Table A/1: Standard + 25%
• Table B/2: Standard + 50%
• Table C/3: Standard + 75%
• Table D/4: Standard + 100% (double standard rates)

Higher tables (E-P or 5-16) continue adding 25% per level.

Rate Differences Between Classes

The premium difference between health classes is substantial. Here is an example for a 40-year-old male purchasing $1,000,000 20-year term:

Over 20 years, the difference between Preferred Plus and Standard totals $10,320 ($780 vs. $1,296 annually times 20 years = $15,600 vs. $25,920).

Factors Evaluated During Underwriting

Medical History

• Chronic conditions (diabetes, heart disease, cancer history)
• Mental health conditions and treatment
• Prescription medication history
• Surgeries and hospitalizations
• Current symptoms or ongoing treatment

Physical Measurements

• Height and weight (BMI calculation)
• Blood pressure
• Resting heart rate

Laboratory Results

• Cholesterol (total, HDL, LDL, triglycerides)
• Blood glucose and HbA1c
• Liver function (ALT, AST)
• Kidney function (creatinine, BUN)
• Nicotine/cotinine (tobacco detection)
• HIV antibodies
• Drug screening

Family Medical History

Insurers typically ask about parents and siblings:

• Heart disease before age 60
• Stroke before age 60
• Cancer before age 60
• Diabetes
• Other hereditary conditions

Lifestyle Factors

• Tobacco use (cigarettes, cigars, chewing tobacco, vaping)
• Alcohol consumption
• Marijuana use (policies vary significantly by insurer)
• Hazardous hobbies (skydiving, scuba diving, rock climbing, racing)
• Aviation (private pilot status)

Driving Record

• DUI/DWI convictions
• Reckless driving citations
• Multiple moving violations
• License suspensions

Occupation

• Hazardous occupations (mining, logging, commercial fishing, offshore oil)
• Law enforcement and military
• Aviation professionals

Financial Factors

• Income (to justify coverage amount)
• Net worth
• Existing insurance coverage
• Bankruptcy history

The Underwriting Timeline

Traditional Full Underwriting: 4-8 Weeks

Step 1: Application (Day 1) Complete detailed health and lifestyle questionnaire.

Step 2: Paramedical Exam (Days 3-10) A technician visits your home or office to:

• Measure height, weight, blood pressure, pulse
• Collect blood and urine samples
• Sometimes perform EKG (for older applicants or high coverage amounts)

Step 3: Records Collection (Days 14-30) Insurer requests:

• Attending Physician Statements (APS) from your doctors
• MIB (Medical Information Bureau) report
• Prescription drug database check
• Motor vehicle report
• Sometimes: inspection report (for very high coverage amounts)

Step 4: Underwriting Review (Days 30-45) Underwriter evaluates all collected information and determines classification.

Step 5: Decision (Days 45-56) Insurer issues offer at determined rate class, declines coverage, or requests additional information.

Accelerated Underwriting: 1-2 Weeks

Many insurers now offer accelerated underwriting for healthy applicants:

Eligibility typically requires:

• Age under 50-55
• Coverage under $1-3 million
• No significant health history
• Favorable results from automated database checks

Process:

• Detailed application with health questions
• No paramedical exam required
• Electronic health records review
• Prescription database check
• MIB report
• Decision in 1-14 days

Trade-off: May not qualify for best rate class without exam evidence of excellent health.

Simplified Issue: Days to 1 Week

Limited health questions, no exam, guaranteed or near-guaranteed acceptance.

Trade-offs:

• Higher premiums
• Lower maximum coverage (typically $50,000-$250,000)
• May have graded death benefit (reduced payout if death occurs in first 2-3 years)

Worked Example: Health Class Impact on $1M 20-Year Term

Applicant profile: James, age 42, applying for $1,000,000 20-year term

Scenario A: Preferred Plus Qualification

• Non-smoker for 10+ years
• BMI: 24
• Blood pressure: 118/76
• Total cholesterol: 185
• No family history of early disease
• No hazardous hobbies
• Clean driving record

Monthly premium: $85 Total 20-year cost: $20,400

Scenario B: Standard Qualification

• Former smoker (quit 2 years ago)
• BMI: 29
• Blood pressure: 138/88 (controlled with medication)
• Total cholesterol: 235
• Father had heart attack at age 58
• No hazardous hobbies

Monthly premium: $145 Total 20-year cost: $34,800

Scenario C: Table B Substandard

• Current smoker
• BMI: 33
• Blood pressure: 145/92
• Type 2 diabetes (controlled)
• Elevated liver enzymes

Monthly premium: $290 Total 20-year cost: $69,600

Cost difference over 20 years:

• Preferred Plus vs. Standard: $14,400 savings
• Preferred Plus vs. Table B: $49,200 savings

Strategies to Improve Your Rate Class

Before Applying

Address controllable factors:

• If overweight, lose weight (BMI improvements can change rate class)
• If blood pressure is borderline, work with doctor to optimize
• Quit tobacco use (most insurers require 12+ months tobacco-free for non-smoker rates)
• Resolve any outstanding medical issues

Timing considerations:

• Apply after sustained health improvements (not right after starting new medication)
• Wait until abnormal labs normalize
• Schedule exam for morning when blood pressure tends to be lower
• Avoid alcohol for 48 hours before exam
• Fast as required for accurate blood glucose and lipid readings

During the Process

• Answer all questions honestly (misrepresentation can void coverage)
• Provide complete physician contact information
• Follow up with doctors to ensure records are sent promptly
• Respond quickly to any requests for additional information

After Receiving an Offer

If offered a worse rate class than expected:

• Ask the insurer for specific reasons
• Request reconsideration if you have additional evidence of good health
• Consider applying with different insurers (underwriting varies)
• Some insurers specialize in certain conditions and may offer better rates

Underwriting Preparation Checklist

• Gather list of all doctors seen in past 5-10 years with addresses
• Compile list of all current medications with dosages
• Know your family medical history (parents, siblings)
• Check your weight and calculate BMI
• Review recent lab results if available
• Quit tobacco use at least 12 months before applying if possible
• Address any controllable health factors before applying
• Schedule paramedical exam for morning hours
• Fast as required before exam (typically 8-12 hours)
• Avoid alcohol for 48 hours before exam
• Avoid strenuous exercise 24 hours before exam
• Get adequate sleep the night before exam
• Have photo ID ready for exam appointment
• Answer all application questions honestly and completely
• Follow up if you haven't heard back within expected timeline
• If declined or rated poorly, ask for specific reasons
• Consider shopping multiple insurers if initial offer is unfavorable