Ratings and substandard offers

What a rating is

Insurers price most applicants at standard rates, which assume no significant additional risk. Some applicants are assessed as carrying more risk than that assumption allows for, and the response is to charge more rather than to refuse.

That increase is a rating. It is also called being rated, or being offered substandard terms, which is an unfortunate piece of industry vocabulary describing the pricing rather than the person.

The important framing: a rating is an offer. The insurer has agreed to cover you. The question is whether the price works.

The two forms

Table ratings are expressed in steps, often written as Table 2, Table 4 and so on, or with letters. Each step adds a set percentage above the standard premium, commonly 25 percent per step. So a Table 4 rating on a policy would cost roughly double the standard premium, since four steps at 25 percent adds 100 percent.

The exact percentage per step varies between insurers, which is one of several reasons the same rating label can mean different money at different companies.

Table ratings are used for ongoing health conditions: diabetes, cardiovascular history, a build outside guidelines, and similar.

Flat extras are a fixed dollar amount charged per thousand dollars of coverage per year, on top of the base premium. They are used for risks that are additional to your general health rather than part of it: a hazardous occupation, private flying, scuba diving, or a defined period after a specific medical event.

Flat extras are frequently temporary. A flat extra applied for five years after a particular event drops off at the end of that period automatically, which is worth confirming in writing when the policy is issued.

Both can appear on the same policy.

Why the same person gets different answers

Underwriting guidelines are proprietary. Each insurer decides which factors matter, how much they matter, and where the thresholds sit.

For a healthy applicant with nothing to assess, insurers land in much the same place. For an applicant with a history, the spread can be wide: standard at one insurer, a moderate rating at another, a postponement at a third, on the identical file.

This is the single strongest practical argument for applying through someone who can place business with many insurers when you have something on your record. It is not about negotiating. It is about which company’s guidelines happen to fit your particular pattern.

What to do with a rated offer

Compare it properly. A rated offer from a fully underwritten insurer is often still cheaper than a simplified issue alternative, and it usually allows a much larger coverage amount. Run the comparison rather than assuming the rating makes it uncompetitive.

Ask why. You are entitled to know the reason. Sometimes it is something you can address with better evidence, such as a series of blood pressure readings from your own doctor rather than one taken at a paramedical.

Ask whether more evidence would help. Where a rating rests on incomplete information, a specialist report or a recent set of results can change the assessment. Insurers will usually say whether it is worth submitting.

Consider taking it and reviewing later. Coverage in force at a higher price is better than no coverage while you look for a better answer. You can pursue a reconsideration afterwards.

Do not cancel anything. Whatever you decide, keep existing coverage until a replacement is issued and in force.

Getting a rating reduced

Many ratings are not permanent in practice, even when they are not labelled temporary.

The usual route is a request for reconsideration, supported by evidence that the picture has changed. What counts as evidence depends entirely on the reason for the rating, and it generally means documented stability over a reasonable period rather than a single favourable result.

Some things to know. There is normally a waiting period before an insurer will look again, often a year or two. The evidence has to come from your medical records, not from a description of how you feel. And a reconsideration can be refused, which leaves you where you already were.

Where an insurer will not move, applying fresh to a different insurer is the alternative. Be careful here: replacing an existing policy has risks of its own, and the old policy stays in force until the new one is genuinely issued.

If the rating makes the premium unaffordable

Reduce the coverage amount rather than abandoning the idea. A smaller policy at a rated price is coverage; nothing is not.

It is also worth asking whether a different product changes the assessment, and whether a different insurer would view the same file differently. Both questions are routine and neither costs anything to ask.