Life Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 1/5
When underwriting is completed, the insurer's decision on a life insurance application may result in:
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
After underwriting, an insurer generally issues the policy at one of several outcomes: standard rates for an average risk, preferred rates for an above-average risk, substandard or rated coverage for an increased risk (with a higher premium or a reduced benefit), or a declination where the risk is unacceptable. The applicant may also be offered a modified or limited form of coverage. The agent communicates the offer to the applicant, who decides whether to accept it.
Why the other options are wrong
- A) Changing the beneficiary is an ownership right exercised by the policyowner; it is not an underwriting outcome.
- B) Underwriting does not convert life applications into annuities; annuities are a separate product decision.
- D) Premium refunds after a fixed period are not a standard underwriting result.
Memory hook
Four doors out of underwriting: standard, preferred, rated, or declined.