What Is Risk Class?
A classification assigned during underwriting that groups applicants by their level of mortality risk, directly determining the premium rate for their life insurance policy.
Understanding Risk Class
A risk class (also called a rating class or underwriting class) is the classification assigned to a life insurance applicant based on the underwriting evaluation. The risk class groups applicants with similar mortality risk profiles together, and each class has a corresponding set of premium rates. Applicants in lower-risk classes pay lower premiums, while those in higher-risk classes pay more. The most common risk classes, from lowest to highest risk, are: Preferred Plus (or Super Preferred), Preferred, Standard Plus, Standard, and Substandard (Table Rated).
The factors that determine risk class assignment include current health status, medical history, family medical history, build (height and weight relative to standard tables), blood pressure levels, cholesterol levels, tobacco and nicotine use, driving record, criminal history, hazardous activities or occupations, international travel to high-risk regions, and aviation activities. Each carrier has its own underwriting guidelines and risk class definitions, so the same applicant may receive different classifications from different carriers based on how each weighs specific health and lifestyle factors.
Understanding your risk class is important because it has a direct and significant impact on your premiums throughout the life of the policy. The difference in annual premium between Preferred Plus and Standard for the same coverage amount can be 40% to 100% or more, depending on the applicant's age and the coverage amount. For high-coverage policies ($1 million or more), the annual savings from a better risk class can amount to thousands of dollars, compounding over the life of the policy into tens of thousands in total premium savings.
Because different carriers weigh risk factors differently, working with an agent who represents multiple carriers is one of the most effective strategies for obtaining the best possible risk class. An applicant with controlled hypertension might receive Standard from one carrier and Preferred from another that has more favorable guidelines for managed blood pressure. This carrier-specific variation is why the independent multi-carrier approach is particularly valuable for applicants with health impairments.
Important Things to Know
Risk classes group applicants by mortality risk and directly determine premium rates, creating significant cost differences between classifications.
Common classes from best to worst: Preferred Plus, Preferred, Standard Plus, Standard, Substandard (Table Rated).
Each carrier has its own underwriting guidelines and class definitions, meaning the same applicant may receive different classifications from different carriers.
The premium difference between risk classes can be 40% to 100% or more for the same coverage, amounting to thousands of dollars annually on larger policies.
Tobacco and nicotine use typically result in a separate, significantly higher-rate classification, often doubling or tripling premium costs.
Key factors include health status, build, blood pressure, cholesterol, family history, driving record, tobacco use, occupation, and hobbies.
Working with an agent representing multiple carriers is the most effective strategy for finding the best risk classification for your specific health profile.
Even a one-class improvement (from Standard to Preferred) can save thousands of dollars over the life of a policy.
Seeing Risk Class in Practice
Illustrative example: Two 45-year-old Knoxville residents apply for identical $500,000, 20-year term life policies. Applicant A, who exercises regularly, has excellent blood work, and no family history of disease, receives Preferred Plus classification with an illustrative annual premium of approximately $450. Applicant B, who has controlled high blood pressure on medication and is moderately overweight, receives Standard classification with an illustrative annual premium of approximately $850. Same coverage, but the risk class difference results in approximately $400 per year in additional premium, totaling $8,000 over the 20-year term. Actual premiums vary by carrier and individual underwriting. In a second illustrative scenario, a 50-year-old Memphis professional with well-controlled cholesterol on a statin receives Standard Plus from Carrier A and Preferred from Carrier B, which has more favorable guidelines for applicants on statin medication. The Preferred classification saves approximately $600 per year on a $750,000 whole life policy. Over a lifetime of premium payments, this carrier selection results in tens of thousands of dollars in savings. Actual premiums vary by carrier and individual underwriting.
Risk Class in Tennessee
Tennessee law under TCA Title 56 requires that risk classification systems used by carriers operating in Tennessee be actuarially justified and not unfairly discriminatory. The TDCI reviews carrier rating practices to ensure compliance with Tennessee insurance regulations and fair treatment of all applicants. Tennessee does not allow unfairly discriminatory rating practices, though individual life insurance rates may vary by factors that are actuarially justified, including age, health, gender, tobacco use, and other risk-related factors. Agents in our network understand the underwriting guidelines of multiple A-rated (A.M. Best) carriers operating in Tennessee and can help Tennessee residents find the carrier most likely to offer the best risk class for their individual health profile. This is particularly important for applicants with health conditions, as the variation in how carriers evaluate specific conditions can result in significantly different classifications and premium rates.
Explore Risk Class in Detail
Get answers to specific questions about risk class.
Related Glossary Terms
Underwriting
The process by which an insurance carrier evaluates an applicant's risk factors to determine eligibility, risk classification, and premium rates for a life insurance policy.
Read Definition →Preferred Plus
The highest (best) risk classification in life insurance underwriting, reserved for applicants in exceptional health with no significant risk factors, qualifying for the lowest available premium rates.
Read Definition →Preferred
The second-highest risk classification in life insurance underwriting, for applicants in very good health with minor risk factors, qualifying for premium rates below standard.
Read Definition →Standard
The baseline risk classification in life insurance underwriting for applicants with average health and mortality risk, serving as the reference point for premium rate calculations.
Read Definition →Learn More
Frequently Asked Questions About Risk Class
Yes. Each carrier has its own underwriting guidelines, risk class definitions, and weighting of specific health factors. One carrier might classify you as Preferred while another classifies you as Standard Plus for the same health profile. This is why working with an agent who represents multiple carriers can result in significantly better rates, as they can identify the carrier with the most favorable guidelines for your specific health situation.
Tobacco and nicotine use (including cigarettes, cigars, chewing tobacco, vaping, and sometimes nicotine replacement products) typically result in a separate "smoker" or "tobacco" classification with significantly higher premiums, often 2 to 4 times higher than non-tobacco rates. Most carriers require 12 to 24 months of complete nicotine-free status to qualify for non-tobacco rates, though some carriers require 3 to 5 years.
The best risk class is typically called Preferred Plus, Super Preferred, or Elite, depending on the carrier. To qualify, applicants generally need excellent overall health, normal blood pressure and cholesterol without medication, healthy body mass index (typically under 27-29), no tobacco use for at least 3-5 years, no significant family history of heart disease or cancer before age 60 in parents or siblings, a clean driving record, and no hazardous hobbies.
Risk class has a dramatic impact on premiums. For a 45-year-old male applying for a $500,000, 20-year term policy, illustrative annual premiums might range from approximately $450 at Preferred Plus to approximately $850 at Standard, and $1,200 or more at Substandard Table 2. The difference between the best and standard classifications can be 40-100%, and substandard ratings can add even more. Actual premiums vary by carrier.
Most carriers do not reclassify existing policies to a better risk class after issue, even if the insured's health improves. The primary exception is tobacco cessation, where some carriers allow reclassification from tobacco to non-tobacco rates after a verified nicotine-free period. To obtain a better classification, you would typically need to apply for a new policy with a new underwriting evaluation.
Have Questions About Life Insurance?
Connect with a licensed Tennessee agent in our network for personalized guidance. Free consultation, no obligation.
Get Your Free Quote