What are Policy Ratings in a Term Life Insurance?

Commonly, the Term life insurance protocols in Canada will be given one of four underwriting assessment:

1. Preferred Rates- These are provided to persons who have the best health and those which have excellent family health history. Preferred rates are usually divided into 'Preferred' and 'Super Preferred' class. The term 'Super Preferred' are provided to the healthiest persons having the best family health history. This can result in savings reaching to thirty percent (30%).

2. Standard Rates – Almost all life insurance applications obtain standard rates. Standard rates are awarded to clients who are in good health. Hence, the family health history of the individual characteristically does not have a factor in to obtaining a standard classification.

3. Substandard Rates - Substandard rates or policy ratings are provided to persons who have health or lifestyle problems that make them at an increased susceptibility to the insurance company. Health problems like angina and diabetes, or issues in lifestyle like previous alcohol and drug abuse can lead to policy ratings of between 50% to 300%, plus the standard rates. If the insured gets a policy rating of 100%, they would have to pay twice the basic standard rate.

4. Declines - Clients who are in a bad health state or have severe lifestyle problems may have their policy application declined. If the application of the insurer is disapproved, they can opt for a simplified issue or guaranteed issue protocol. These regulations usually have a waiting time of 2 years on the death benefit, which means that if the insured individual dies in the first two policy years, the recipient will be given a return-of-premium plus interest.

See Also

Whole Life Insurance Canada

What is Term vs. Whole Life Insurance?

Importance and Benefits of a Burial Insurance

External Links

LSMinsurance.ca

Nomedicallifeinsurance.ca

Money.msn.com