QuestionMay 24, 2025

Which of the following types of risk will result in the highest premium? A. All risks pay equal premiums B. Substandard risk C. Preferred risk D. Standard risk

Which of the following types of risk will result in the highest premium? A. All risks pay equal premiums B. Substandard risk C. Preferred risk D. Standard risk
Which of the following types of risk will result in the highest premium?
A. All risks pay equal premiums
B. Substandard risk
C. Preferred risk
D. Standard risk

Solution
4.1(219 votes)

Answer

B. Substandard risk Explanation 1. Identify Risk Types Substandard risk refers to individuals with higher health risks, leading to higher premiums. Preferred risk involves healthier individuals, resulting in lower premiums. Standard risk is average, with moderate premiums. 2. Determine Highest Premium Substandard risk typically results in the highest premium due to increased likelihood of claims.

Explanation

1. Identify Risk Types<br /> Substandard risk refers to individuals with higher health risks, leading to higher premiums. Preferred risk involves healthier individuals, resulting in lower premiums. Standard risk is average, with moderate premiums.<br /><br />2. Determine Highest Premium<br /> Substandard risk typically results in the highest premium due to increased likelihood of claims.
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