Pennsylvania Life and Health Insurance Exam 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: B
Rationale: An individual categorized as a substandard risk is deemed uninsurable at standard rates due to health issues, risky habits, or hazardous occupations. This classification reflects the increased likelihood of claims, warranting higher premiums.
Preferred risk (A) refers to those who qualify for lower rates due to favorable health and lifestyle factors. Rating risk (C) is not a standard term in insurance classification and does not accurately describe an individual's insurability status. Standard risk (D) applies to individuals who meet the insurer's criteria for standard rates, which is not the case for those classified as substandard.
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