Life Insurance Basics
How does an insurer usually issue a policy to an applicant classified as substandard?
Answer and explanation
Answer: C. A substandard risk is accepted with a rated premium, or sometimes a table rating or flat extra, so the price matches the mortality expected. Insurers do not lengthen contestability or shorten the free look to accommodate a rating.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, substandard classification
More life insurance basics questions
- What do the two principal parts of a life insurance application contain?
- What does a policyowner receive under a participating policy that a nonparticipating policy does not provide?
- What does liquidity mean in the context of a permanent life policy?
- What does the human life value approach measure?
- What gives a permanent policy its cash accumulation feature?
- What is a participating life insurance policy?
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