Disability Occupations Guides
The Insurance Buying Guide: Occupational Classification
The kind of work you do is a very important factor that affects the cost and structure of disability income insurance. Most insurance companies group jobs according to the risk of injury they pose. These groups typically are identified as Classes 1, 2, 3 and 4 or A, B, C and D. Class 1 (or A) occupations are the least hazardous and Class 4 (or D) occupations are the most hazardous.
The following chart illustrates a typical occupational classification table.
Occupational Classifications
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Class 1 (or A)
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Physicians, dentists, lawyers, accountants, school teachers, actuaries, insurance sales representatives, corporate officers, most engineers, architects, corporate executives.
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Class 2 (or B)
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General clerical employees, bank tellers, inside salespersons, outside salespersons with limited travel, most building contractors (office duties only), barbers, electricians (no high voltage work), chemists, registered nurses, practical nurses.
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Class 3 (or C)
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Bartenders, waiters and waitresses, cooks, gas station attendants, salespersons with extensive travel, high-voltage electricians, plumbers, mechanics, most factory workers.
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Class 4 (or D)
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Bridge workers, construction workers, truck drivers, sanitation workers, fire fighters, police personnel, mine workers, tree trimmers, window washers.
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If you work in a Class 3 or 4 occupation, an insurance company will multiply the base rate for coverage by a factor of anything from 1.1 to 3.0 to determine the premium you have to pay. These multiples usually will be determined, at least in part, by a company's claims history for particular occupations.
Pricing models for disability income insurance are not standard. Different insurance companies will sometimes classify the same job differently. And the multiples that one insurance company applies to job classifications may be different than those used by another company. So it pays to shop around.
Another occupational pricing factor: An accident or sickness that would be considered minor for someone in most occupations could be totally disabling in other jobs. For example, a beautician with an infected finger due to a torn cuticle might be unable to perform the duties of her occupation and be disabled. A bank president with an infected finger is not likely to be totally disabled. Therefore, in this context, a beautician would present a higher occupational risk than a bank president.
The benefit amount also may be restricted by occupation. For example, a doctor may be able to purchase up to $15,000 a month of disability income protection, but a plumber who may have the same earned income as the doctor is limited to a maximum benefit of $5,000 per month -- due to the higher occupational risk to which the doctor is subject.
Still other restrictions or limitations may apply due to a person's occupation. For example, a fire fighter may have a restricted maximum benefit amount -- and only may be able to purchase a disability income policy with a maximum benefit period of two years and nothing shorter than a 90-day EP, due to the occupational risks involved.
Sometimes, there is a range of risks within a given occupation. For instance, a salesperson working in a clothing store does not present any unusual degree of risk -- but a travelling salesperson who drives 60,000 to 80,000 miles per year is exposed to a much higher level of risk.
Click on one of the occupational guides below to see how your client's risk would be classified.
Assurity Life Insurance Company Occuupational Guide
The Cincinnati Life Insurance Company Disability Agent Guide
Illinois Mutual Disability Guide
MetLife Occupational Classification Pocket Guide
Mutual of Omaha Occupation Classification Manual
Principal Occupational Class Schedule
Find how occupational classification can help assess your client's risk by calling PIPAC LIFE Brokerage at 866.452.3670 or email us at sales@pipaclife.com.
