Health · Chapter 19 · Risk Classification
Substandard (Rated) Risk
Definition
A risk below the insurer's standard/average guidelines — due to poor health, a dangerous occupation, or hazardous habits. Some substandard applicants are rejected outright; others are accepted with an increased premium. A "rated policy" or "rated premium" means a substandard contract with an above-average (rated-up) premium, and the policy may carry specific exclusions (e.g., for a racing hobby).
In plain English
Coverage, but with a surcharge — the percentage rate-up depends on how much extra risk the applicant brings.
Exam tip
"Rated" on the exam = substandard = higher premium. It does NOT mean declined.
Easy to confuse with
These are what this term gets tested against — if you can't tell them apart cold, drill the contrast.
Related terms