Which risk classification includes individuals issued "rated policies" due to high-risk factors?

The classification of substandard risks applies to individuals who are issued "rated policies" due to high-risk factors. This classification is specifically for applicants whose health, lifestyle, or other characteristics present a higher likelihood of loss for the insurer compared to standard applicants.

Typically, those who fall into the substandard risk category may be issued policies with modified terms, such as higher premiums or specific exclusions, to account for their elevated risk. This rating reflects the insurer's assessment that these individuals are more likely to require benefits, thus necessitating adjustments in terms to still allow them access to insurance coverage.

In contrast, the other classifications denote different levels of risk. Standard risks typically reflect individuals whose health and lifestyle factors are average and meet the guidelines for standard premiums. Preferred risks refer to individuals who are considered lower risk, often enjoying lower premiums due to optimal health and favorable lifestyle choices. Declined risks, on the other hand, are individuals who are denied coverage altogether due to their high risk and inability to meet the insurer's criteria.