What characterizes "substandard" risk in life insurance?

The designation of "substandard" risk in life insurance refers specifically to individuals who are considered to pose a higher risk to insurers due to various factors related to their health or lifestyle. This can include a history of serious medical conditions, chronic illnesses, or risky behavior such as smoking or excessive drinking. Because these individuals are perceived as having an increased likelihood of incurring claims, insurance companies typically charge higher premiums or may impose exclusions when underwriting their policies.

In contrast, individuals in excellent health, those with no risk factors, or those who maintain a healthy lifestyle through regular exercise and proper diet would not be classified as substandard. These groups are more likely to be categorized as standard or preferred risks, which generally result in lower premiums and more favorable terms in their life insurance policies.