Santosh has applied for a term insurance policy. His anticipated mortality is significantly lower than standard lives and hence could be charged a lower premium. Under risk classification, Santosh will be classified under _________.

The correct answer is: B. Preferred risks

Preferred risks are individuals who are considered to be at a lower risk of death than standard lives. They are typically younger, healthier, and have no significant health problems. As a result, they are charged a lower premium for their term insurance policy.

Standard lives are individuals who are considered to be at an average risk of death. They are typically middle-aged and have no significant health problems. They are charged a standard premium for their term insurance policy.

Substandard lives are individuals who are considered to be at a higher risk of death than standard lives. They are typically older, have health problems, or engage in risky behaviors. They are charged a higher premium for their term insurance policy.

Declined lives are individuals who are considered to be at too high a risk of death to be insured by a standard insurance company. They may be very old, have serious health problems, or engage in very risky behaviors. They are not able to obtain term insurance.

In the case of Santosh, he has applied for a term insurance policy and his anticipated mortality is significantly lower than standard lives. This means that he is considered to be a preferred risk and will be charged a lower premium for his policy.