Which of the following describes a person who is NOT acceptable by an insurer at standard rates?

A substandard risk refers to an individual who has a greater likelihood of filing a claim due to health issues, hazardous occupations, or other risk factors compared to the general population. Insurers view these individuals as presenting a higher risk, which typically results in them being charged higher premiums or being offered limited coverage options.

Insurers categorize risks to determine how they will rate individuals for life insurance. A standard risk is one that fits typical health and lifestyle criteria and can be offered coverage at standard rates. A preferred risk is even more favorable, often with better-than-average health, resulting in lower premiums. An unacceptable risk represents those who an insurer would outright decline or not offer any coverage due to extreme risk factors; this is not the same as a substandard risk, which can still receive a policy, though not at standard rates.

Thus, the identification of a substandard risk is crucial in underwriting processes, as it allows insurers to adjust terms and pricing based on the applicant's specific health profile and risk characteristics.