Insurance companies have to weigh a lot of factors when they are underwriting insurance policies. They must analyze all the factors of a particular case to determine the ultimate risk they are taking on by issuing the policy, which, in turn, determines the premiums for policyholders.substandard life insurance

To make this process easier and more objective, insurance companies have created what are called risk classes.

Risk classes are groups of companies or individuals that have characteristics that are similar. Each type of insurance policy will use different risk classes during the underwriting process for new policies to determine the risk and set the premium for the policyholder.

Individuals or companies that are determined to be of a lower risk will pay a lower monthly premium for their insurance policy. Those with higher risk will pay a higher premium.

In life insurance, one of these risk classes is called substandard. This risk class is determined by a number of factors, which will be discussed below.

Substandard Risk Class Definition

The substandard life insurance risk class is, by definition, the lowest risk class assigned to individuals who are determined to be insurable. This class of individuals is considered to be the highest risk to insurance companies or, in other words, are most likely to pass away within the term of the life insurance plan.

This risk class will often pay the highest monthly premiums for their life insurance plans, and they also may be limited in what specific policies that are available for them to purchase.

The substandard life insurance risk class is sometimes referred to as a table-rated plan because of the extra monthly fee, or “table rating,” they might be forced to pay as a result of being in this risk class.

While each insurance company will have its own set of rules that qualify individuals to fit into the substandard risk class, there are general guidelines that most insurance companies will follow.


Body Mass Index, or BMI, is a standardized measurement of an individual’s body fat when compared to their weight and height. There are standard BMI charts for both adult females and males that have been created by the Centers for Disease Control and Prevention.

A person’s BMI determines whether he or she is determined to be a healthy weight based upon only their height — not other factors such as their age, environment, or family history. Overweight individuals might have trouble finding affordable life insurance rates.

The BMI categories are:

  • Underweight: Less than 18.5
  • Normal weight: 18.5-24.9
  • Overweight: 25-29.9
  • Obese: 30 or more

Gender and Age

Men and women have different life expectancies and different risk factors for disease.

Men are considered to be at higher risk for life insurance policies since they typically die younger and tend to have jobs that are riskier and live riskier lifestyles (more on that later). In fact, women generally live roughly five years longer than men do, on average.

A person’s age is also an obvious determining factor for their risk category. The younger the individual is, the lower rating they’ll get as part of their risk classification.

Family History

An individual’s family history plays a role in determining their life insurance risk class. People who have a long family history of certain hereditary diseases will be considered riskier by life insurance terms.

If one or more of your immediate family members died from certain diseases like heart disease or Alzheimer’s, then you will be at higher risk of contracting that disease as well. That’s why insurance companies will analyze your family’s medical history, as it can be a predictor of your own future health.


If you have a dangerous job, you will be considered at higher risk for life insurance policies. This could include jobs such as construction, mining, and truck driving.

Dangerous jobs could lead to accidents that result in life insurance benefits being paid out to beneficiaries. This is why people who have more dangerous jobs — either because of the job itself or the surrounding environment — will be more likely to fall into the substandard life insurance risk class.


One of the final risk categories that life insurance companies weigh is an individual’s lifestyle. This includes whether they smoke, drink alcohol, or have a substance abuse problem. All of these factors would increase the likelihood of a person passing away before their typical life expectancy.

If people engage in certain hobbies or other behaviors, they could find themselves in the substandard life insurance risk class. This includes scuba diving, sky diving, or riding a motorcycle.

Can an Individual Change Risk Class?

When an insurance company issues a life insurance policy, the individual that’s covered will pay a certain monthly premium based on their risk class. People who fall into the substandard life insurance risk class will naturally pay the highest monthly premiums.

But, just because a person falls into this risk class at the outset of the insurance policy doesn’t mean they have to remain there for the life of the policy. People can improve their health and, in turn, improve their insurance risk class.

Some insurance companies will allow people to be re-evaluated at certain points during the term of the life insurance policy. After going through another medical evaluation, they could be determined to fall into a “better” risk class than substandard, which could lower their monthly premiums.

If an individual stops smoking or loses a significant amount of weight, for example, they could improve their health outlook enough that they “graduate” from the substandard life insurance risk class to standard or better.

Unfortunately, there are some risk factors that will be out of an individual’s control, such as a health condition that they inherited from a family member. Still, it’s always a great idea to improve your health as much as possible, even if you aren’t able to qualify for a lower life insurance premium.

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