If my life insurance policy is “Rated”, what does this mean?

If your policy is “rated” it means that the insurance company believes you represent an above average risk. As such, they will only agree to insure you at a higher premium. (In extreme cases they will simply decline to insure you.)

To put this process in context, we understand that around 88% of cases insured through the Internet are not “rated”. These people pay exactly the same price as they were quoted online.

The first quotation you receive always assumes that you are generally in good health for your age, you do not have an occupation that can represent a risk to your health, your blood-line family does not have a history of ill-health that could be inherited, and you do not follow hazardous pursuits or regularly visit countries with known health problems. The insurance company asks for this sort of information on your application form which you get if you decide to proceed after you have received your initial quotation.

If you do not have any of the above then, in all likelihood, your initial quotation will apply.

If you do have any of the above, then the insurance company will want more information. They may also ask questions if you want a large sum to be insured. This is fair enough as they need to know what level of risk they are potentially taking on.

If they have asked for more information, then this information goes to one of the Insurance Company’s Underwriters whose job it is to calculate what level of risk you represent. They do this with reference to Actuarial Tables which are based on the Company’s experience over millions insurance policies. It then becomes the Underwriters job to decide how much to charge you.

If the life insurance company does ask for more details, or even a medical, it is not necessarily as bad as it may seem. Many people who are asked questions or who have a medical (which incidentally, the insurance company pays for) still qualify for the price quoted initially.

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