What term is used for a person who is considered an under-average or impaired insurance risk due to various factors?

The term used for a person who is considered an under-average or impaired insurance risk due to various factors is "Substandard Risk." This classification is assigned to individuals who, due to health issues, lifestyle choices, or other risk factors, present a higher likelihood of claims than the average population.

Insurance companies evaluate applicants' risk levels to determine the premiums they should charge. Substandard risks are generally charged higher premiums or may have certain exclusions in their policies to mitigate the insurer's increased exposure to potential losses. Understanding this classification is crucial because it helps underwriters assess the appropriate coverage and cost tailored to individual health risks.

Other classifications such as "Standard Risk" and "Preferred Risk" refer to individuals who present average and above-average risk levels, respectively, and are therefore eligible for more favorable insurance terms. "Insurable Risk" is a broader term that encompasses risks that can be insured against, but it does not specifically address the impaired risk status that substandard risk does.