With regard to substandard life insurance risks, which of the following statemen

Question

With regard to substandard life insurance risks, which of the following statements is CORRECT? When the applicant represents a substandard risk, the policy may be modified to reduce the benefits provided Because of stringent underwriting requirements, most life insurance applicants are classified as substandard risks. To provide coverage to substandard risks, insurers are allowed to charge an extra premium; however, they cannot alter benefit periods or waiting periods. An applicant can be deemed a substandard risk based on physical condition only; no other criteria may be considered.

Explanation / Answer

Answer c. Substandard insurance considers that this business may pose a risk to the insurer and hence the extra premium.

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