Know It All: Why Occupation Class Matters

Occupation class is a key factor in every individual disability insurance policy you sell. It affects premium rates as well as the type of coverage available. But did you know it could help you improve your marketing efforts? Understanding occupation class helps you tailor the conversation and focus the right fit.

Understand the Basics

Underwriters make decisions on what to offer and how to price it according to two basic risk factors:

• How likely is it that the insured will become disabled? The risk of injury or sickness is higher in some occupations than in others. Employees involved in manual labor, of course, are more likely than office workers to experience a disabling event. Even in similar professions, tasks and activities make a difference. A cardiologist, for example, is at lower risk than an emergency room physician.
• How likely is it that the insured will stay disabled? The severity of a potential injury or sickness is important. But classification of occupations also considers whether any event would prevent someone from returning to work. A construction worker with a serious shoulder injury could be sidelined for months or years. An executive could return to the office while the shoulder heals.

A third factor weighs in as a smaller part of this equation: How stable is the occupation over time? Market forces tend to affect disability claims for real estate agents and other financial occupations, for example. But many professions are generally unaffected by economic turns.

To review all the IDI occupation classes, see The Standard's IDI Online Reference Product Guide, beginning on page 56.

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