Get the best life insurance rate when flat extras are involved.
We show you how to minimize flat extras and save money on your life insurance.
Flat Extra Life Insurance Overview
What is a flat extra?
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 or permanent.
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 3 years is calculated as follows:
$100,000/$1000 x $6 = $600 Flat Extra Charge per year
The following chart tells you 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 there any other expenses such as a table rating being 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 of the best companies are offering before accepting a policy.
Medical
Medical flat extras are common for cancer survivors, people with HIV, and those treated for alcohol or drug abuse.
Most are temporary, lasting 5 years or less.
It’s important to have us re-shop the marketplace for you.
Many times with cancer histories, the insured wants life insurance soon after treatment has ended.
We’ll shop life insurance companies for offers, and many will come back with a flat extra lasting 5 years for example.
When we re-shop the market the next year, we may find you a different company offering a flat extra for 3 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 the type of job you have.
The occupation class assigned to your job determines if you will need to pay more for life insurance.
Occupations such as police or fire are not typically rated.
Industries such as commercial fishing, loggers, miners may receive an occupation class rating on the lower end.
Astronauts, professional race car drivers, 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 big 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 if you are consistently diving to greater depths than 100′, you may get rated.
Cave and shipwreck divers will receive a flat extra.
Life Insurance Policy Exclusions
Some life insurers allow you to exclude certain activities from coverage as a way 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?
Definitely 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.
In some cases, we may have 5 companies indicate that charge a flat extra and one company 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 5 years,
But a year later we may have a company that only charges you for 2 years.
Table Rating vs Flat Extra
Table rates and flat extras are used to assess an additional premium when your underwriting risk is greater than 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.
Conclusion
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.
Michael J Horbal
I’m the owner of RiskQuoter. We specialize in life insurance underwriting, helping you get the best rates whether you have perfect health or a history of medical problems.
by Michael Horbal – Updated on January 26, 2021