Question

How does an insurance company handle sub-standard risk?

a.

Accept the risk with no special terms

b.

Decline the proposal outright

c.

Accept the risk with special or altered terms

d.

None of the above

Answer: (c).Accept the risk with special or altered terms Explanation:An insurance company can decide to accept sub-standard risk with special or altered terms, such as charging extra premium for the extra risk.

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Q. How does an insurance company handle sub-standard risk?

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