Which classification suggests that an individual has a higher risk factor compared to the standard classification?

The classification indicating a higher risk factor compared to the standard classification is known as substandard risk. This designation is applied to individuals who present increased risk for insurers due to various factors, such as health conditions, lifestyle choices, or occupational hazards. Because these individuals are considered more likely to experience a negative outcome that could lead to claims, they may face higher premiums or additional terms compared to those classified as standard or preferred risks.

In contrast, preferred risk classifications are reserved for applicants with exceptional health or low-risk factors, while normal risk encompasses individuals whose profiles align with average risk characteristics. A high-risk classification is a more general term and does not specifically indicate a recognized level within the industry standards. Therefore, substandard risk is the precise classification that captures the essence of greater risk compared to the standard.