What is the definition of Rated Policy?

A Rated Policy is a policy that covers a risk that has a more-than-average possibility of loss.

Premium rates for a rated policy are higher than those who present average likelihoods of loss. The insurance company asses the application and checks whether it is a standard risk, or a rated risk. For life and health insurance products, this may mean reviewing the proposed insured's health condition, occupation, lifestyle, hobbies, health habits, as well as one's financial situation.

There are more than one classes of rated policies, based on the level of likelihood of the risk happening. The higher the rating, the higher the premiums.

For example, a smoker will have a higher rating that a non-smoker, but a smoker who's working as a lumberjack will have an even higher rating than a smoker who works in the office.

• Insolvency
• Misstatement of Age or Sex Provision
• Modified Premium Policies
• Moral Hazard
• Comprehensive Coverage