What are table ratings for life insurance, and how do they affect what kind of coverage I can receive?
Answers | 2
Table ratings are extra cost additions to a Standard rate class approval. Across all carriers, there are Rate Classes (some nomenclature differences exist from one carrier to the next, but here they are); Preferred Plus, Preferred, Standard Plus (where available), and Standard. From Preferred to Standard, the cost increases. When there is a health impairment that is fairly severe, carriers add table ratings from 1 through 10 (or A through J) as a way of accounting for the extra mortality risk - and those table ratings are incremental increases in cost for the applicant. Table ratings don't necessarily affect what kind of coverage you can receive: a 20 year term plan or a universal life plan is still the same plan and you can get any of the available plans that are offered but what will be affected by the table rating is the cost of that plan.
If Erin has high blood pressure for 5 years, well controlled, and good reports from her doctor, she could get a Preferred rate class. But if she has a stent from about 3 years ago, takes 3 different medications associated with that, and maybe something else in the mix, that would first put you at Standard (table ratings are never applied to other than Standard rates). Then, a carrier may go to Table 3, 4, or 5 depending on the condition and severity of the condition. In some cases, they add what are known as Flat Extras to account for the extra mortality. A Flat Extra is an increase that usually goes away over time, such as 5 years, leaving you with a Standard rate after that first 5 years. Table ratings tend to remain as premium increases that do not go away.
To sum it up, table ratings are added to Standard rates to account for your mortality at the time of application. Table ratings increase the cost of your plan but not the features or benefits of your plan.
Hope that helps!
Term.com and LifeInsuranceToday.US
The only things the table ratings effect is the premium cost. The coverage is the same and will pay out exactly the same.