Flat Extras – How to Beat This Costly Life Insurance Expense

By Michael Horbal – updated on – 09/21/2022

If you were approved for life insurance, but the insurer added a flat extra expense, you will want to read this article.

We show you how to minimize flat extras and save money on your life insurance.

You’ll learn how to get the best life insurance rate available when flat extras are involved.

Flat Extra Overview

A flat extra is an additional premium charged by life insurers.

The flat extra represents the excess mortality risk of your medical condition, occupation, or avocation.

Flat extras are added to a policy during underwriting.

The cost is indicated as a rate per $1,000 of coverage.

It may be temporary for most medical conditions or permanent if the flat is for your occupation or avocation.

Flat Extra Calculator

Here’s the math formula to calculate flat extras:

(Face Amount/$1000 x Flat Extra Rate = Flat Extra Charge Per Year)

Example – A $100,000 life insurance policy with a flat of $6 per thousand for three years is calculated as follows:

$100,000/$1000 x $6 = $600 Flat Extra Charge per year

The following chart shows how much extra you will pay per year for life insurance when this expense is added.

Life Insurance$2.50 Flat$5.00 Flat$7.50 Flat$10.00 Flat
$100,000$250$500$750$1000
$250,000$625$1250$1875$2500
$500,000$1250$2500$3750$5000
$750,000$1875$3750$5625$7500
$1,000,000$2500$5000$7500$10000

Underwriting Flat Extras

The following are questions you should ask:

  • Why is this expense being added to your policy?
  • What is the rate per thousand?
  • Is the flat temporary or permanent?
  • If temporary, how many years will it last?
  • If permanent, does the flat remain when the level term period ends?
  • Are any other expenses, such as a table rating, added to the policy?
  • Were other life insurers charging a flat?
  • If yes, what are the details of other companies?

Price differences exist from company to company.

Make sure you know what all the best companies offer before accepting a policy.

Medical

Medical flat extras are standard for cancer survivors, people with HIV, and those treated for alcohol or drug abuse.

Most are temporary, lasting five years or less.

You can save money by having us shop your coverage for you each year as it may be possible to get a lower flat extra or get an offer where the flat extra lasts for a shorter time.

We’ll shop life insurance companies for offers, and many will come back with a flat extra lasting five years, for example.

When we re-shop the market the following year, we may find you a different company offering a flat extra for three years.

As time passes, you may be less of a risk to life insurers.

Occupation Flat Extras

Most occupations do not require an additional expense.

Most life insurers have occupation classes depending on your job type.

The occupation class assigned to your job determines if you need to pay more for life insurance.

Occupations such as police or fire are not typically rated.

Industries such as commercial fishing, loggers, and miners may receive an occupation class rating on the lower end.

Astronauts, professional race car drivers, and boat racers receive the most expensive ratings.

Military forces, including special forces, typically receive ratings somewhere in the middle.

Avocation Flat Extras

Avocations cover sports such as scuba diving, private aviation, rock and mountain climbing, skydiving, and motorized racing.

A significant factor in determining your life insurance rate is your level of experience.

Underwriters look to see if you are operating at your level of proficiency,

Or are you the type who is pushing the boundaries of your technical experience?

For example, there is been a tightening of underwriting guidelines for private pilots over the past few years.

It seems that more pilots with minimal experience are flying.

With life insurance for scuba divers, 100′ depth seems to be the magic number.

Life insurers understand that you may dive deeper for a certification dive,

But you may get rated if you consistently dive to greater depths than 100′.

Cave and shipwreck divers will receive a flat extra.

Life Insurance Policy Exclusions

Some life insurers allow you to exclude specific activities from coverage to reduce the flat extra expense.

We don’t recommend this unless it’s a situation where you retired from participating in that activity years ago.

And unless you want to hear it from the judge,

You probably don’t want to exclude your current activities from the policy if this is life insurance for a divorce case.

FAQ

People ask us the following all the time.

Do All Life Insurers Charge the Same Rate?

Not! When we discuss your case with you, we’ll shop out to companies for underwriting feedback first.

Some life insurers may deny life insurance to you rather than assign a flat.

The price range and duration may vary significantly from company to company.

Sometimes, we may have five companies that charge a flat extra and one that doesn’t.

Can I Reduce a Flat Extra?

Yes, maybe. It pays to re-shop your life insurance each year as there may be a better deal next year.

We may be able to get a company in the future to issue your life insurance policy without the additional expense.

For some life insurance cases, we may even be able to use the original paramedical exam, saving you from a repeat exam.

This is especially true if you’ve had cancer.

In the early years after treatment, the expense may be added to your policy for five years,

But a year later we may have a company that only charges you for two years.

Table Rating vs Flat Extra

Table rates and flat extras assess an additional premium when your underwriting risk exceeds the average.

When comparing the two, here’s what you need to know:

  • Table ratings are used for medical risks
  • Flat extras are used for medical and non-medical risks
  • Most are temporary, while table ratings are permanent.

Final Words

We’ll tell you what each company is charging you for their flat.

We can also look at an accidental death insurance policy as part of your overall insurance plan.

This may help to lower your overall cost.

In addition, we can re-shop your coverage each year if we think there will be better opportunities in the future.

Please take a few minutes to submit your quote request today.

Other Underwriting Articles

Michael Horbal - Author

Michael J. Horbal

Owner of RiskQuoter

Too many people overpay for life insurance because they end up with the wrong life insurance company, agent, or both. That’s why I started RiskQuoter – To help you get the best life insurance rates available.

As an independent insurance agent, I’m licensed in all 50 states and the District of Columbia and offer 40+ life insurance companies to ensure you get your best rate!

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