Question

What is the difference between standard risk and sub-standard risk?

a.

Standard risk is insurable at standard premium rates, while sub-standard risk is not.

b.

Standard risk is risk associated with an individual with good health, while sub-standard risk is risk associated with an individual with poor health.

c.

Standard risk is low-risk, while sub-standard risk is high-risk.

d.

None of the above.

Posted under Life Underwriting Principles and Concepts Part 2 IC22 Life Insurance Underwriting

Answer: (a).Standard risk is insurable at standard premium rates, while sub-standard risk is not. Explanation:Standard risk is the risk associated with an individual that is considered to be insurable at standard premium rates by insurance companies, while sub-standard risk is the risk associated with an individual that is considered to be higher than normal and cannot be insured at standard premium rates.

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