Life Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
An applicant is classified as a substandard (rated) risk for life insurance. Compared with a standard-risk applicant, the substandard applicant will generally be:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
A substandard or rated risk has a higher-than-average chance of loss due to health, occupation, or avocation. The insurer responds by charging an extra premium (flat extra or percentage of table rating) or by modifying the coverage. This is one of the underwriting results under objective LIFE-II.I.3, alongside issue at standard rates, postponement, and declination.
Why the other options are wrong
- B) Substandard applicants pay more or receive less coverage; they do not get a larger death benefit for the same premium.
- C) A rated policy differs from standard by its extra premium or modified terms; it is not identical.
- D) Waiving premiums is a rider benefit for disability, not a response to substandard risk classification.
Memory hook
Substandard = extra premium or modified terms. The rating reflects the extra risk.