Substandard Risks

Also called "special risks" or "rated"

A substandard risk has a greater probability of making a claim. About 10% of applications are substandard. (looking for better statistics)

If the life is insurable, there is an

  1. additional premium to cover the additional risk
    • temporary
    • permanent
  2. exclusion (e.g., for a skydiver, no death benefit is payable if the cause is skydiving)

The policy is issued with an amendment. The applicant must sign the delivery receipt acknowledging acceptance before the policy can go in force.

If the cause of the rating no longer applies, the extra cost can usually be removed with evidence of insurability.

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