What are substandard life insurance policies?

Substandard life insurance policies are designed for individuals who are considered higher risk by insurers. This classification often arises due to various factors such as health conditions, lifestyle choices, occupational hazards, or age. Insurers categorize these individuals as likely to have a shorter life expectancy or a greater chance of filing a claim compared to the standard insured population.

Because of this higher risk, substandard policies may come with modified terms, which could include higher premiums, reduced coverage amounts, or specific exclusions. Their purpose is to provide coverage options to those who may otherwise struggle to obtain insurance due to their perceived risks, ensuring that even higher-risk individuals can secure some level of financial protection for their beneficiaries.

In contrast, options relating to lower-risk individuals or healthy policies do not apply to substandard policies, as the focus is specifically on those who may face difficulties getting coverage due to their elevated risk levels.