General Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
After evaluating an application for individual health insurance, an underwriter classifies the applicant and assigns a higher premium. This outcome is known as:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Underwriting results fall into a few broad categories. A standard classification accepts the risk at the normal rate. A substandard (rated) classification accepts the risk but charges an extra premium to reflect an elevated chance of loss. A decline rejects the risk, and a postponement defers a decision until a condition improves. Here, acceptance with a higher premium is a substandard rating — the underwriter is pricing the added risk rather than refusing it.
Why the other options are wrong
- B) A standard classification means acceptance at the normal, unrated premium, not a higher one.
- C) A declined classification rejects the application outright, which did not happen here since coverage was offered.
- D) A postponed classification delays the decision, typically pending medical improvement, rather than offering coverage at a higher rate.
Memory hook
Rated = accepted with a price bump. Declined = no. Postponed = wait and see.