Your Job Can Change the Cost of Your Disability Insurance
Disability can be a difficult product to get a handle on because there are so many variables associated with it. I believe it would be fitting to discuss one of the key variables within a disability insurance contract that will heavy dictate the amount of coverage and options a carrier will allow an applicant (if they will even be able to offer coverage at all), and what the premium will be for their policy.
Most carriers will offer ranges of occupational classes that can be anywhere from a higher Class 6 (less risky, better options, and generally cheaper in cost per thousand of coverage) to a lower Class A or B. The more risky the occupation of the applicant, the lower the occupational class will be with more restrictions. Even though a disability insurance policy covers injuries and illnesses off the job as well as on the job, most claims are submitted due to an occurrence off the job. However, this still doesn’t reduce the importance to an insurer to make sure that the appropriate occupational class on an application is applied for.
Higher occupational classes can include attorney’s, CPA’s, most doctors, engineers, and executives, etc. Many lower occupational classes or those that could not be insurable at all could include: construction workers, hairdressers, installers, painters and chef’s, etc. The bottom line is that your occupation will heavily dictate what your policy’s structure will look like, in other words, what your cost will be, and the benefit options available to you.
Some carriers will offer coverage to those high net clients that may not otherwise be able to get coverage as an athlete or an actor, for example. They will charge extra premium to issue the policy which isn’t a huge problem for the applicant as they can most likely easily afford it.
If a you have a current DI policy in-force and changes their occupation, it is your immediate obligation to notify the insurance company. You could be at risk of not being able to get a claim put in if you are injured or become ill due to an occupation that was not covered on the policy. The definition for disability for most contracts is “the inability to do the material and substantial duties of one’s own occupation for which they are reasonable suited due to education or training.” So if that job is now different than the one that you were covered for on the application, why should the carrier have to pay a claim?
About the author: Kyle McDonald holds FIC, FICF, FSCP® & CLTC designations. His viewpoint on life insurance is simple, “Anyone with a family must have life insurance. In the end, life insurance is for others you care about, not you.” He is ready to help you and your family get the best option available. Contact Kyle today at 1-800-651-1953 or KMcDonald@Pivot.com.