New York State Life Insurance Exam Questions Practice Question
An individual who is NOT acceptable by an insurer at standard rates because of health, habits, or occupation is called a
Correct Answer: D
Rationale: An individual deemed unacceptable by an insurer at standard rates due to health, habits, or occupation is classified as a substandard risk. This category includes those who present higher risks than average, resulting in higher premiums or denial of coverage.
Option A, rating risk, refers to the process of determining the risk level for insurance pricing but does not specifically denote an individual's classification.
Option B, standard risk, applies to individuals who meet typical underwriting criteria and are eligible for standard rates.
Option C, preferred risk, describes individuals with lower risk factors who qualify for better rates. Thus, only substandard risk accurately represents individuals facing higher premiums or coverage challenges.
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