If a life insurance policy applicant is classified as a substandard risk, what is the most likely outcome?

When a life insurance policy applicant is classified as a substandard risk, it indicates that the applicant has certain health conditions, lifestyle choices, or other factors that increase the insurer's risk of payout compared to the average insured individual. As a result, insurance companies typically respond to this higher risk by charging a higher premium to balance the increased likelihood of a claim.

Issuing a standard policy for substandard risks is generally less common, as such policies typically cater to individuals who pose a lower risk. Refusing coverage is also an option for certain extremely risky applicants, but it is not the most typical outcome for those classified as substandard. Reducing the death benefit may be a way to manage risk, but it is more common to adjust the premium to reflect the higher risk associated with the applicant. Therefore, charging a higher premium is the most likely outcome when a risk is deemed substandard.