If a change to a more hazardous occupation occurs, which statement describes the effect on disability benefits?

• A. A change to a more hazardous occupation permits adjustment of benefits and rates
• B. A change to any occupation requires cancellation
• C. A change to a less hazardous occupation increases benefits
• D. A change to a related occupation has no effect

Answer: (A)

Disability benefits are tied to the insured’s occupation through occupational risk classifications. When a person moves to a more hazardous occupation, the insurer can reclassify the risk and adjust both the benefit amount and the premium to reflect the higher risk. This is why the correct statement is that benefits and rates may be adjusted. It isn’t automatic cancellation, and moving to a less hazardous job wouldn’t typically increase benefits. Even a related occupation can trigger an adjustment if it is more hazardous than the current classification.