Which risk classification is described as underwriters assess as not insurable?

Which risk classification is described as underwriters assess as not insurable?

• A. Standard Risk
• B. Declined Risk
• C. Substandard Risk
• D. Preferred Risk

Answer: (B)

Underwriters judge how risky a proposed insured is and decide whether coverage can be offered at all, and at what terms. When a risk is so high that the insurer cannot issue a policy under any terms or price, that applicant is described as a declined risk. In other words, there’s no policy the insurer can write for them. Other classifications still involve insurability but with different pricing or limitations: standard risk qualifies for a normal premium, substandard risk is priced higher due to health or risk factors, and preferred risk usually gets a lower premium because the overall risk is better than average. So the term that means “not insurable” is the declined risk.

Underwriters judge how risky a proposed insured is and decide whether coverage can be offered at all, and at what terms. When a risk is so high that the insurer cannot issue a policy under any terms or price, that applicant is described as a declined risk. In other words, there’s no policy the insurer can write for them.

Other classifications still involve insurability but with different pricing or limitations: standard risk qualifies for a normal premium, substandard risk is priced higher due to health or risk factors, and preferred risk usually gets a lower premium because the overall risk is better than average. So the term that means “not insurable” is the declined risk.