Table Ratings and Flat Extras Explained

Table ratings and flat extra’s are used to price high risk life insurance. If you have any major health impairments or are participating in any risky activities, you’ll need to understand these terms if you’re in the market for life insurance.

Table Ratings

Life insurance table ratings are an additional charge on top of standard rates used for those with health issues. A life insurance company is going to give you a “health classification” and that correlates to how much premium you pay.  Here’s a list of those health classifications from best (preferred plus) to worst.

Preferred Plus
Preferred
Standard Plus
Standard
Standard Table 2
Standard Table 4
Standard Table 6
Standard Table 8

Some companies go up to Table 16.

Most life insurance carriers have their table ratings equal to 25% of standard rates. So a table 2 (or table B) rating will add 50% to standard rates or a table 6 (or table F) rating would add 150% to standard rates. Note that some companies have more competitive table ratings.

Your table rating depends on the severity of your health issue. After a life insurance company reviews your medical exam results and doctors records, they will assign a table rating according to their underwriting guidelines. Each company has its own unique underwriting guidelines and it’s the job of your agent (termlife360.com) to find the company that will give you the most favorable rate.

Flat Extras

The flat extra method of rating a life insurance policy charges an extra dollar amount per $1,000 of the face amount. Flat extras can be permanent or temporary. They are usually assigned to risky activities such as: base jumping, skydiving, scuba diving, rodeo riding or any hazardous occupation. They are also assigned to people who are recovering from major health issues.

Let’s start with an example of a permanent flat extra. Let’s say you’re a skydiver doing less than 50 jumps a year. You’re applying for $250,000 20 year term policy. Based on your health, you can get this coverage for $1,000 a year, but the life insurance company assigns a flat extra of $3 per $1,000 of coverage if you want skydiving covered. The flat extra would add an additional $750 a year ($3 x 250) for a total of $1750 of annual premium. The life insurance would cover all causes, including your skydiving. Be aware that if you retire or choose to give up skydiving or whatever hazardous activity you’re doing, your agent can negotiate that flat extra off your policy.

A temporary flat extra example would be successful treatment of breast cancer. Let’s say you beat breast cancer last year. Underwriting guidelines show you need to be cancer free for 5 years to qualify for standard rates, so they still offer the coverage, but assign a flat extra of $5 per $1000 of coverage for 4 years. After that 4 years the flat extra charge falls off and you pay standard rates.

If you are faced with a table rating or flat extra, make sure:

  1. You are open, honest and detailed about your health issues or risky activities so your agent can find the company that will look most favorably at your situation. Withholding information is not in your best interest.
  2. Your agent submits an “informal application” to the companies they think will offer the best rates. This takes several days and the vast majority of agents don’t do this because it takes so much time. Your agent will get a reply from an underwriter confirming the rate BEFORE you submit the application. No surprises and you can attach this to the application. Assuming the exam goes well and you were honest about your health, the rate you receive will be no worse than what comes back on the informal application.
At Term Life 360, we offer over 50 life insurance carriers and are impaired risk specialists.  We’ll go through all our carriers to find the company that will offer you the lowest rates.

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