What describes individuals who apply for life insurance but have moderate physical impairments?

Individuals who apply for life insurance and have moderate physical impairments are classified as sub-standard risks. This classification occurs because their health conditions may lead to a higher likelihood of adverse outcomes for the insurer, which can affect the insurability and terms of the coverage offered to them.

Sub-standard risks are typically assigned higher premiums compared to standard risks, which represent individuals in average health who do not have any significant health concerns. Insurers evaluate the applicant’s medical history and current health status to determine this classification, allowing them to adjust coverage terms and pricing accordingly.

In contrast, preferred risks apply to individuals whose health factors are above average, indicating lower risk for the insurer. Standard risks are generally individuals with average health, while non-insurable risks apply to individuals with such severe health issues that they cannot be insured at all. Thus, when moderate physical impairments are present, categorizing these applicants as sub-standard risks accurately reflects their increased risk profile when obtaining life insurance coverage.