Accident and Health Insurance Agent/Broker Practice Exam

The change of occupation provision in an insurance policy addresses what happens if a policyholder changes to a more hazardous occupation after purchasing the policy. When a claim is made, one of the actions the insurance company can take is to pay a reduced benefit if the policyholder has moved to a higher risk occupation.

This provision is designed to protect the insurer from the increased risk associated with more dangerous jobs. If the policyholder's new occupation has a higher risk of injury or disability than the occupation listed in their policy, the insurer may adjust the claim's payout accordingly. This is a fair approach since premiums are typically based on the risk associated with the original occupation.

Increasing premiums specifically due to a change in occupation typically does not occur at the time of a claim. Instead, the premiums are usually adjusted at the renewal time of the policy, and the claim is adjudicated based on the terms of the policy related to the new occupation.

The options involving payment of benefits stated in the policy or requiring a doctor's statement are not directly related to how the change of occupation provision is utilized at the time of claim. They address standard procedures unrelated to changes in occupational risk.