What type of policy is issued to a substandard risk due to dangerous hobbies or health issues?

A rated policy is specifically designed for individuals who present a higher risk to insurers due to factors such as dangerous hobbies or health issues. In insurance terminology, individuals classified as substandard risks may not qualify for the standard insurance rates. As a result, underwriters will issue a rated policy that includes higher premiums to reflect the increased risk associated with the insured's circumstances. These policies allow insurers to provide coverage while managing the associated financial risk effectively.

In contrast, a preferred policy is reserved for those who are in excellent health and present lower risks, while a standard policy is issued to applicants who meet the basic criteria for insurance coverage. A basic policy generally provides minimal coverage and may not account for the unique risks associated with substandard applicants. Therefore, a rated policy is the most appropriate response for those with specific risk factors due to their hobbies or health.