Define: "Premium Rate Class"
The appropriate price category to which an applicant qualifies according to an insurance company's underwriting guidelines. Common rate classes are Preferred Plus, Preferred, Standard Plus, Standard and Substandard.
OTHER USES -- "A rate class is a specific risk category assigned to you by an insurance company. Insurance companies consider your personal medical history, family medical history, occupation, hobbies, and other factors to determine your rate class. The rate class in turn determines how much your premium will be.
Based on your answers to specific questions, you are assigned to an appropriate rate class for each insurance company. As you continue the application and underwriting process, your rate class (and premium) could change as additional health history and personal information is gathered. If this happens, you will have the option of selecting a different insurance company, canceling your application, or continuing with the company you originally selected.
More Examples of Premium Rate Class:
Methods used to calculate premium rates for group health insurance coverage require varying levels of staff and financial commitment and differ in how closely they match premium revenue to projected expenses in aggregate. Determining the appropriate method for a group requires an analysis of resources available as well as an examination of competitive forces, state and Federal legislation, and underwriting issues.
Rate development methodology refers to the formulas used to calculate premium rates for health insurance coverage for a specific group. Several methods can be used to develop rates. The goal of each method is to match premium revenue to projected medical and administrative expenses. This matching of revenue and expense can occur at the individual group level or by block of business, depending on the method used. Methods that most successfully match revenues and expenses also are more expensive to implement in terms of staff and system resources.
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