How Your Health Rating Affects Guaranteed Universal Life Insurance Premiums

We have some data for guaranteed universal life insurance premiums that we’ve been using to answer questions such as what is the best age to buy guaranteed universal life insurance and how much more do men pay for guaranteed universal life insurance than women.

We’ll use the same data for this article as well. If you haven’t read the other two articles, here is a brief overview of the data:

  • Premiums for ages 18-80
  • Premiums for five health ratings (three non-smoker classes and two smoker classes, denoted by NS and SM, respectively). Lower numbers within each group are better.
  • Premiums for both men and women
  • Premiums are paid for only 20 years (read here and here for why we chose this)

The premium data (graphs) that we’ll be using for the analysis:

Comparing All Classes to the Best Class

Qualifying for the best possible health class is ideal, but it’s not always possible. In this section we will take a look at how premiums for all of the classes other than the best class compare to the best class.

First, we will start with males. All of the classes are on the first graph, and the following two graphs split the data by smokers and non-smokers.

Right off the bat, as you might expect, you can see that smokers pay significantly more than non-smokers.

If you look at non-smokers on their own set of axes, you can see that the second best class does not pay a ton more than the best class (at most around 10%). But the next best class pays roughly 20%-30% more.

Smokers pay significantly more, sometimes even more than twice as much. The smoker class differences also increase more with age, while the non-smoker class differences are relatively more stable as age increases.

The table below shows some summary statistics for each of the four classes, confirming what we saw from the graphs.

The good news is that if you are healthy, but maybe not the most healthy, it is still possible to get a very competitive premium.

If you are a smoker in average health (for a smoker), on average you’ll be paying twice as much as the healthiest non-smoker!

Statistic  NS 2 NS 3 SM 1 SM 2
5% 20% 53% 75%
10% 31% 104% 130%
Mean 8% 25% 76% 100%
Median 8% 26% 73% 103%

And all of the same graphs for females:

We can draw similar conclusions to the males from this graph. But for the women the trends are a bit smoother. The men’s increasing trend over time was a bit wavy, with ups and downs along the way.

The women’s differences from the best class also tend to be a little bit smaller than the men’s differences.

We see a similar pattern here for women. The second best class is not far from the best class, while the class after that drifts away more significantly.

Female smokers will pay significantly more than their non-smoking counterparts, averaging about 93% more for average health smokers (almost, but not quite, twice as much).

Statistic  NS 2 NS 3 SM 1 SM 2
6% 12% 47% 61%
10% 31% 84% 114%
Mean 8% 24% 66% 93%
Median 8% 25% 67% 95%

Comparing Incremental Changes in Health Class

Another useful item to look at is the change from class to class. Obviously a smoker is going to pay a lot more than the best non-smoker, so it might be more relevant to compare consumers within subgroups (i.e. smokers and non-smokers) as well as the change from one subgroup to another (i.e. the worst non-smoker class to the best smoker class).

We have the same set of graphs as before (all consumers, and then non-smokers and non-smokers):

From this, we can broadly see that going from a non-smoker to a smoker has the greatest impact on premium.

As we saw earlier, going from class 1 to class 2 was not a huge change. But here, we can see that going from class 2 to class 3 has a much larger effect (often double the amount).

There is a significant jump from average health non-smokers to healthier smokers (i.e. people who are healthy but happen to smoke).

Within the smoker class, there is a less significant jump from healthier smokers to average health smokers.

From the table below, you can see that going from a non-smoking class to a smoking class has by far the biggest impact. A healthy smoker on average pays 40% more than an average health non-smoker.

Statistic NS2/NS1 NS3/NS2 SM1/NS3 SM2/SM1
5% 10% 26% 9%
10% 20% 61% 20%
Mean 8% 16% 40% 14%
Median 8% 17% 40% 13%

And the women’s data:

Similar conclusions can be drawn for women — smokers pay significantly more.

In younger years, the difference between the best and second best class compared to the difference between the third best and second best class is not huge. But as time goes on, the gap widens.

Like men, female smokers will pay a lot more. The differences for women just tend to be a little bit smaller.

Statistic NS2/NS1 NS3/NS2 SM1/NS3 SM2/SM1
6% 4% 29% 10%
10% 19% 41% 21%
Mean 8% 15% 34% 16%
Median 8% 16% 33% 17%


Getting the best health rating possible, and therefore the best rate, is of course desirable. But even if you can’t get the very best rate, if you are still healthy for the most part, even the second best class is not too much more expensive — usually about 8% to 10% more.

If you are less healthy, you’ll see a bigger, but not huge increase — usually about 12-30% more (depending on gender).

If you are a smoker, the increase is going to be very large — usually 50% to over 100% more.

One thing to keep in mind is that different companies have different names for their health classes, as well as different health criteria for qualify for each one. We can help you find the company and policy that is best for you.

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