Occupational Classes

It indicates the risk of disability from job duties and the insured's ability to return to work — Disability income insurance replaces lost earning capacity, and earning capacity is tied directly to what a person does for a living. Occupational classes rank jobs by the physical and environmental hazards they present, a roofer faces far greater injury risk than an accountant, and by the feasibility of returning to work after a condition. Occupation therefore drives both the premium and, often, the definition of total disability. This is why an applicant's job change can trigger a policy review or an occupation-specific rider.

National insurance concept

The insured's occupation — Occupation is the dominant rating factor in disability income insurance because a person's job directly determines both the likelihood of becoming disabled and the likelihood of staying disabled. Insurers assign applicants to occupational classes, from low-risk professional and clerical classes to high-risk manual, aviation, and hazardous classes, and the class drives the premium. Health, age, gender, and avocations also matter, but occupational class is the anchor of disability rating. Two applicants with identical health can pay very different premiums because of the jobs they hold.

National insurance concept