An applicant does not qualify for standard coverage but is still insurable. The insurer may respond by offering the policy:
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
When an applicant presents higher-than-standard risk, the underwriter may still approve coverage on a modified basis: charging a higher premium, making the policy rated or substandard, or adding a restrictive rider that excludes a particular condition. These mechanisms let the insurer price the extra risk without declining the applicant outright. A single-premium or term-only response is not required, and no insurer promises future re-underwriting as a substitute for underwriting today. The result is one of the core underwriting outcomes alongside issuing as applied for or declining.
Why the other options are wrong
- B) Issuance is not restricted to single-premium or term designs. Ratings and exclusion riders are the standard insurer responses to higher-than-standard risk.
- C) The insurer may offer any appropriate policy type with a rating or exclusion rider. There is no requirement that the offer be limited to term insurance.
- D) Underwriters act on the risk presented today. They do not trade a promise of future re-underwriting for the current underwriting decision.
Memory hook
Not perfect, not denied — rated or excluded is the middle path of underwriting.