Rated Plans

Rated plans are insurance policies that cover people with high-risk factors. These types of plans are usually for life insurance policies.

Rated plans tend to be more expensive, having higher premiums than standard plans, because there is a greater chance the insured will become injured or will die. Insurance companies want to make sure that if they are going to cover a high-risk person, they will be compensated for it.

The rating, or extra compensation, may be an additional percent of what the insured pays for the total premium. It could also be a flat amount that is added to every $1,000 of benefit money that would be paid once the policy is activated.

Risk Factors
The amount of the additional compensation will vary, depending on the degree of risk that an applicant carries. Rated plans often contain special limitations and exclusions that are exclusive to that policy and the policyholder. The limitations and exclusions also depend on the different risk factors of the insured. There are a few different risk factors that an insurance company will consider when rating an applicant.

Occupation
Occupation may be a factor an insurance company will consider in a rated plan. If the applicant's job is something quite dangerous, such as circus performer or coal miner, the applicant will likely be offered a rated plan.

Hobby
A hobby or personal interest may be another factor for an insurance company to consider. If the applicant pursues skydiving or deep sea diving as a hobby, an insurance company will most likely charge that person a higher rate.

Impairment or Disease
A physical or mental impairment or a disease that is extremely problematic or unusual is a risk factor for an insurance company. This is because the full effects of the impairment or disease may not be known, and many different problems could result. This could include several different ailments, such as having a history of heart disease.

Applying for Insurance
An applicant typically applies for the most favorable risk class, the one in which he is considered not very risky and won't have to pay extra money on a rated plan. Most people are able to be covered under a policy that is low risk after a risk appraisal is conducted.

However, there are some people who the insurance companies decides they are high-risk applicants after the risk appraisal. Additional premiums become necessary for the applicants to pay in order to receive coverage on the specific high-risk factors on their risk profiles. These people are offered rated plans that are more expensive than standard insurance policies.

A risk appraisal will be conducted when someone applies for a policy. This is when the insurance company reviews personal information about the applicant, including state of health, financial situations, occupation, and hobbies. All of these factors will impact the risk profile that is created about the applicant. The risk profile tells the insurance company how high of a risk an applicant is and whether he needs to be covered by a rated plan with higher premiums or if he can be covered by a standard plan.

The Positive Side
Even though rated plans are more expensive, there are several positive aspects about them:
1. The premiums for many rated plans cannot be increased if other health issues arise in the future.
2. Many policies have reconsideration. This is when an insured person is eligible to have the premiums reduced if he becomes less of a risk factor and his overall condition improves.
3. An applicant is guaranteed a certain premium rate at the time he applies, but down the road his condition may become worse and a policy may become more expensive. Accepting a policy when it is offered will lock in a premium rate as well as the peace of mind at being insured.

Different insurance companies have differing policies and factors. It is important that people talk to their own insurance providers about their personal policies. Or for those who are currently shopping for a policy, they need to be sure to discuss the different aspects of the policies with each of the different insurance providers.