Insurance providers use different methods of measuring your body and assessing health to see which type of insurance rates you qualify for. Once your health is assessed, which typically includes reviewing your body mass index (BMI), you’re placed in an insurance classification that determines how much you pay.
To make matters more confusing, no two insurance companies abide by the same rules, so what you pay for life insurance may not be the same rate an equally healthy person your age pays to their company. More than that, many of these methods such as the BMI scale are outdated and don’t help health-conscious people save money on premiums. A lot of consumers don’t realize when they are shopping for insurance just how complicated the process of getting a quote can be. To get the best price, which can save you thousands over the life of your policy, there are a few things you should understand about how life insurance companies assess your health.
Why Do Carriers Use a Classification System?
Insurance carriers have been using classification systems for as long as they’ve been around, and it all has to do with risk. Before covering you with adequate life insurance, they want to know what your risk factors are. If you’re considered unhealthy, you’re at a higher risk of dying early, meaning that the company will have to shell out money to cover you before you’ve paid into your insurance enough to cover much of the cost.
For example, if someone purchases a life insurance plan on his 30th birthday and he’s still alive when he turns 61, the insurer doesn’t have to pay anything. However, if this same person dies at age 55, the insurance company is required to pay the policy’s death benefit to his beneficiary.
Naturally, insurers will do all they can to minimize the amount of money they pay out, so they look at risk factors like family history, lifestyle, current health, and BMI. If someone has a family history of heart disease, smokes, goes skydiving on the weekends, and essentially has a higher chance of passing away before the age of 60, his premiums will be much higher than someone who is considered a lower risk.
What Are the Life Insurance Classifications?
Image via Flickr by Sole Treadmill
Each insurance company considers different criteria for assessing health and overall risk, and they also have different classifications to go along with it. The best possible classification is often called Preferred Plus, which is the best life insurance category you can qualify for.
Preferred Plus people generally do not take medications, do not have a poor health history, have a normal BMI, and don’t have any family history of diseases. The bad news is that fewer people can qualify for this class.
The Preferred classification is the second-best category. Preferred individuals are deemed in excellent health but have a few minor issues that keep them from falling into the Preferred Plus category. These minor issues may be that they take medications or have a family history of cancer or heart disease. They may even be in perfect health but participate in dangerous activities like piloting an aircraft or participating in high-risk sports.
Then there’s the Standard Plus category. This classification suggests you’re in average health with minor issues, such as being slightly overweight according to the BMI scale. You may or may not have a family history of diseases, but you’re more of a risk factor than those in the Preferred category.
Finally there’s the Standard category, which is where most Americans fall on the life insurance spectrum, often through no fault of their own. Those in the Standard category are considered of average health and might take multiple medications. They may have a family history of cancer and other diseases as well as fail to meet the height and weight requirements to qualify for a better rate. If you’re wondering why your height would even be a factor in determining your health, you’re not alone.
Outdated Tools Don’t Consider Health Conscious People
Some measurement tools don’t take into account a person’s activity levels or diet. One example is the body mass index (BMI). All a BMI shows is a measurement based on your height and weight, not how much body fat or muscle you have. It doesn’t even consider your waist-to-hip ratio, which is thought to be a more accurate assessment of health risk. Naturally, this is bad news for bodybuilders who tend to have a higher BMI but are fit and active.
If you fall outside the “healthy” BMI range but you live a healthy lifestyle, you eat right, and you exercise regularly, traditional life insurance companies can’t provide you with the best rates you deserve. That’s where Health IQ comes in.
Unlike other insurers, Health IQ accounts for your physical fitness, muscle tone, diet, and other factors that prove you’re healthier than any BMI chart indicates. As long as you are health conscious and managing any conditions well, you’ll get the best possible rates regardless of what outdated measurement practices say.
About Health IQ
Health IQ’s mission is to improve the health of the world by celebrating the health conscious through social and financial rewards. Health IQ is a licensed life insurance agent in all 50 states and has helped thousands of health-conscious people secure billions in insurance coverage. Founded in 2013 by a team of health-conscious entrepreneurs, Health IQ gathered research and data to convince top-rated, innovative insurance carriers that health-conscious people have lower mortality and deserve lower rates on life insurance. Learn more at: HealthIQ.com/Life-Insurance