Where is the difference between standard risk and substandard risk reflected?

The difference between standard risk and substandard risk is reflected in premium charges. Standard risk individuals are considered average risks, meaning they have a typical likelihood of filing a claim based on statistical norms. Consequently, they are charged standard premiums. On the other hand, substandard risk individuals have higher health risks or potential liabilities, leading insurers to charge higher premium rates to compensate for the increased probability of claims. This adjustment in premium reflects the insurer's need to mitigate risk while still providing coverage.

The other options do not directly correspond to the distinction between standard and substandard risk. Policy duration typically refers to the length of time the policy is in effect, which is not determined by the risk classification. Coverage limits set the maximum amount the insurer will pay under the policy, which can be influenced by various factors but is not specifically tied to the risk classification. Underwriting criteria are the guidelines used to assess risk but do not represent the financial implications as clearly as premium charges do.