In a change of occupation scenario, rate determination is based on which factor?

In a change of occupation scenario, rate determination is based on which factor?

• A. The insured's age at issue.
• B. The more hazardous occupation.
• C. The insured's salary.
• D. The state of residence.

Answer: (B)

In a change of occupation, the premium is adjusted based on the more hazardous job the insured now performs. Underwriters price life insurance by the risk of death, and occupation is a major risk factor. If the insured shifts to a higher-risk occupation, the policy is re-rated to reflect that increased hazard, which typically raises the premium. If the new job is less risky, the premium could potentially be reduced, though many policies use the most hazardous occupation for rating. Age at issue matters for the original premium but not the updated rate after a change of occupation. Salary doesn’t determine the rate class in this context, and state of residence doesn’t dictate the occupation-based rating used when the risk changes.

In a change of occupation, the premium is adjusted based on the more hazardous job the insured now performs. Underwriters price life insurance by the risk of death, and occupation is a major risk factor. If the insured shifts to a higher-risk occupation, the policy is re-rated to reflect that increased hazard, which typically raises the premium. If the new job is less risky, the premium could potentially be reduced, though many policies use the most hazardous occupation for rating.

Age at issue matters for the original premium but not the updated rate after a change of occupation. Salary doesn’t determine the rate class in this context, and state of residence doesn’t dictate the occupation-based rating used when the risk changes.