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Posted: 1 Aug '21

What is a Rated Life Insurance Policy?

What is a Rated Life Insurance Policy?

In insurance, life policies are rarely similar. All individuals have different insurance needs and vary in terms of risk, hence the variation in insurance life policies. So how do insurance providers know how to rate you?  They use a simple rating system to quantify risk levels and then offer a life insurance policy. If you are in a high-risk category, you get a rated life insurance policy. Ask a Vistaplan advisor today for more details.

Life Insurance Rate Classes 

Most insurance carriers use four primary classes.

  • Preferred Best
  • Preferred
  • Select
  • Standard

If you are getting a life insurance policy from a company, you need to figure out which class you fall into and which insurance carrier gives you the best rates within that class. The best rate class is the ‘Preferred Best,” where you pay the lowest price for great coverage. 

What Are Rated Life Insurance Policies?

A rated life insurance policy is also known as a sub-standard life insurance policy. Typically, this policy is awarded to people who work in high-risk occupations or those with less than standard health. The premiums for rated life insurance are higher than those in a standard policy. This means that if you apply for an insurance policy and receive a rated life insurance policy, you pay a higher amount than standard policy users for the same amount of coverage. 

Shopping for a Life Insurance Policy 

When you get a rated life insurance policy, it’s best to ask your broker if it’s possible to improve your class. You also want to find a broker that can shop around with different carriers to find you a better class and rates, especially if changing classes is challenging. 

Insurance carriers rate people differently. For example, when it comes to smoking, insurance carriers rate smokers at higher risk. However, they may place smokers in different categories depending on how many cigarettes they consume. Naturally, a person that smokes two cigarettes a year is preferred to a daily smoker.  

What If You Can’t Change the Rated Life Insurance Policy?

The best way to think about a rated life insurance policy is to remember that it’s better than no life insurance. With an active policy, you have a better chance at providing financial coverage for your loved ones after your passing. 

Get a Life Insurance Policy in Edmonton Today 

Vistaplan Financial Group helps you find the right insurance at the best rates. Contact our life insurance broker for more information.


About the Author - David Motkoski

David Motkosk At the Helm of Vistaplan Financial Group

David is a well-respected insurance advisor with over 30 years of experience helping healthcare professionals, business owners, and their families secure their financial futures. He takes the time to make certain his clients understand the life, disability, and health insurance products they are purchasing, so they can make the right choices for their budgets, plans, and futures. CONNECT WITH ME ON LINKEDIN

Life & Disability Insurance for Alberta Health Care Professionals, Business Owners, and Their Families Since 1983