Life Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 1/5
After underwriting, if an applicant does not qualify for standard coverage, the insurer may:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Underwriting outcomes include standard issue, preferred issue (better than standard), substandard or rated issue (extra premium for higher risk), and decline. A rated policy charges an extra premium for the increased mortality risk while still providing coverage, and a deferral is possible while additional information is gathered. The insurer decides based on the risk assessment; it is never required to guarantee lower premiums or issue coverage automatically.
Why the other options are wrong
- B) Rated coverage increases the premium for the added risk; it never guarantees a lower premium.
- C) Coverage is not automatic for a substandard risk; the insurer may rate or decline.
- D) Referring the applicant to a competitor is not a standard underwriting outcome.
Memory hook
Underwriting verdicts: preferred, standard, rated, declined. A 'toll road' premium still gets you coverage.