The Change of Occupation provision in a Disability Income policy states that, in the event the insured changes to a less hazardous occupation, which of the following may apply?

• A. Benefits can be increased in the event of a covered claim
• B. Benefits are reduced
• C. Policy terminates
• D. Premium increases

Answer: (A)

The Change of Occupation clause in a disability policy is meant to adjust benefits when the insured’s job risk changes. If the insured moves to a less hazardous occupation, the insurer recognizes the lower risk and may allow an increase in the monthly disability benefit to reflect that improved risk profile (and often updated earnings assumptions). In other words, safer work can lead to higher potential benefits because the policy is aligning payout with the insured’s current risk level. This adjustment typically requires notifying the insurer and may involve underwriting or premium changes. The key idea is that a less hazardous new occupation can justify increasing benefits, rather than reducing them or terminating the policy.