Standard vs. Sub-standard rates

“Substandard rate” – refers to premiums charged to persons who are considered higher-than-average risk categories or applicants with moderate physical impairments.

Increased rates. Applicants with sub-standard risks may be insured at increased rates to compensate for the extra hazard.

Some substandard rates are not permanent – in some cases, a person may be considered sub-standard during the application but the life insurance company may review his or her status after a certain period to qualify him or her as a  standard risk. For example, at the time of application, the applicant is overweight, the client may be given a substandard rate, but after 2 years, the weight may be asked again so that premiums will be returned to a standard rate.

Factors. The variables or factors that may qualify you to a sub-standard rate include: hazardous occupation, location of your work, hobbies, health condition, family health history, etc.

Hazardous occupation – exposes the worker to a degree of sustaining injury, or where the working conditions expose him to elements that can cause sickness or social hazards.

Blanket policies – refer to insurance policies covering all hazards.

Rate adjustments – these are instances when the amount of the death benefit of a policy is restricted during the early years of the policy.