Which scenario is most likely to result in an applicant being labeled as substandard risk?

An applicant is most likely to be labeled as substandard risk when they have a family history of hereditary diseases. This is due to the increased likelihood that such hereditary conditions could be passed down, which raises concerns for insurers about the potential future health of the applicant. Insurers assess risk not only on an individual's current health status but also on genetic predispositions to certain illnesses that could lead to higher claim costs.

Having a family history of diseases such as heart disease, diabetes, or certain types of cancer can indicate a greater risk of these conditions manifesting in the applicant. Consequently, insurance companies often consider this information when determining risk classifications and premium rates.

In contrast, participation in team sports is typically seen as a positive factor, as it may indicate an active lifestyle, while maintaining a healthy diet reflects a commitment to overall health and wellbeing. Living in a safe neighborhood is also generally irrelevant to health risk assessment, as it relates more to safety than to health outcomes.