What is the difference between Substandard life insurance and Standard life insurance?

Answer 1

All individual life insurance is issued with a risk class. An underwriter reviews the medical history of the applicant and assigns a risk class which groups that person with others who have a similar mortality expectation (likelihood of death). Each risk class has a different price. A Standard policy is one in which the person being insured has an average life expectancy. The risk class issued is Standard. A Substandard policy is one in which the person being insured has less than an average life expectancy, i.e. substandard applicants are more likely to die sooner than standard applicants, so they have to pay more for their coverage. There are also Preferred classes for those applicants who appear to have a longer life expectancy than average and their premiums are less than Standard policies.