What Is Underwriting Class? Definition

Why it matters

Carriers set their own class names and rules, so a person may qualify as preferred with one and standard with another. Classes depend on health, tobacco use, build, and family history. Shopping several carriers can help. Final expense plans often have fewer classes than large term policies. Ask for the class name on any quote.

Source: naic.org

Where we use this term

Related terms

Risk Class: A risk class is the category of insured people a carrier uses to group applicants with similar expected risk. It decides which premium rate the applicant pays.
Preferred Plus: Preferred plus is usually the best underwriting class a carrier offers. It is for applicants in excellent health with very good build, clean records, and no tobacco use, and it carries the lowest premium.
Preferred: Preferred is an underwriting class just below preferred plus. It is for applicants in very good health, and it carries lower premiums than the standard classes do.
Standard: Standard is the underwriting class for applicants with average health and risk for their age. It is the benchmark that other classes are priced against.
Tobacco Rating: A tobacco rating is a higher premium class for people who use tobacco or nicotine products. It usually costs much more than the nontobacco rate.

All 241 terms

Why it matters

Where we use this term

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