Life Insurance Risk Types
Every other person who is insured with an insurance company is a "risk" in its eyes. On the event of death of the insured, an insurance company needs to shell out extra money which makes them categorize every insured into the mentioned category. Only if a person doesn't have serious health problems — then he is called a "standard risk." Standard risk individuals qualify for an insurance company's at standard rates. If somebody is in the average health though, he could be a "preferred risk" and qualify for lower, preferred rates.
Factors considered by the insurance companies as ‘Preferred Risks’
Here are some of the factors insurance companies consider when categorizing someone as preferred risk. But these definitions of standard and preferred risks vary from company to company.
- No history of cardiovascular disease, stroke, diabetes, cancer or alcohol/drugs.
- No family history of cardiovascular disease prior to age 60, for parents/siblings.
- No flying as a private pilot, or in aviation for two years prior to applying for policy.
- Having an average, untreated blood pressure that doesn't exceed 150/90.
- Having a cholesterol level that doesn't exceed 260 (250 for tobacco users).
- Having a cholesterol / HDL ratio that doesn't exceed 7 (6 for tobacco users).
- Weight that doesn't exceed the copany's limits.
Changing one's rating from standard to preferred and to lower the rates
Some things about the health won't change. But there are certain things about one's lifestyle that one can do in order to promote his own health and thus get the premium to be paid to the insurance companies lowered. These are: quitting smoking, taking steps to lower the cholesterol level or getting one's weight down etc. Each company has its own standards but, if one demonstrates improvement for a year or two, most insurance companies will consider that evidence of permanent improvement and will consider him for the preferred status.