(General Guidelines - There Are Exceptions & Big Lou Gets Them)
The Ratings Ladder - If you haven't already watched our How Life Insurance Works Video, you should do so when convenient. The rating you receive on your Life Insurance Application will not be done just by negotiating. In our world of technology, the Insurance Companies have a ton of information available about your health profile. This includes your doctor's records, lab results including the labs you do for the insurance exam, your prescription history, and information contained in your MIB (Medical Information Bureau) report. With information like this on millions of insureds over decades, they have a really good idea about which health profile factors are a higher risk. They compile the information above and assess your risk factors and that gives them a price for the amount and term of insurance you have requested. Now, it is possible that an underwriter could miss something and price you too high, and that is where Big Lou can come in and help the underwriter see your profile in a better light. Each insurance company has a different ratings manual and they each look at every health profile differently. The each have niches where they are better than others. For some insurance companies this could be weight, or diabetes, or sleep apnea, or anxiety, or hundreds of other issues.
Finding the right insurance company is what Big Lou specializes in. Once the underwriter has reviewed your profile they will place you on the "Ratings Ladder" as we like to call it. This ladder has 12 rungs on it, with rung number 1 being the least expensive and rung number 12 being the most expensive. For every age and gender there is a separate ladder. Every 50 year old male is on the same ladder, and every 50 year old female is on their own age/gender ladder. Everyone starts at rung number 4 and it is called the Standard Rate. Looking at your specific health profile, the underwriter will find credits and debits and move you up and down the ladder until you settle at your final rung. A diabetic may be debited and moved to rung 6, but credits may be found in their control of diabetes or weight or cholesterol that can move them back to rung 3 or 4. Big Lou's job is to help the underwriter find as many credits in your health profile as possible to get you placed on the lowest rung of the ladder as possible. Common names for these rungs on the ladder are below.
Preferred Plus - Rung number 1 - Clients with minimal medications and no significant health history. 2% of clients get this rate.
Preferred - Rung Number 2 - Only For clients who take minimal medications and with very mild health conditions. Blood Pressure, Cholesterol, and other minor conditions. 5% of clients get this rate.
Standard Plus - Rung Number 3 - This rate class allows a client to be a little overweight, and use medications for depression, sleep apnea, some forms of well controlled late onset diabetes and cancers. About 13% of clients get this rate.
Standard - Rung Number 4 - This is generally the best rate class available for those 20 - 30 lbs overweight or more, diabetes, cancer history, and heart conditions. About 30% of people qualify for this rate class.
Table Ratings - Rung Numbers 5 - 12 - The other 50% of approved clients fall into one of 12 table ratings. Basically each table assessed adds a 25% rate increase off of the standard rate class. If a standard rate premium is $1000 per year, a Table 2 rate class would be $1500 (50% more). These rate classes are for less well controlled diabetes, many heart conditions, narcotic pain medication long term use, and many more less well known conditions. Talk to your agent about your specific health conditions to get the most accurate quote.
Author: Big Lou Big Lou is just like you—he's on meds too. Big Lou is about reality in life insurance. He's been through good times and bad. Big Lou knows you have special needs, and he's here to help guide you through the life insurance process.