Occupational Class

Occupational class is the category assigned to an individual based on the type of work they perform and the level of risk associated with their job. Insurers use occupational classes to help determine eligibility, premium rates, and benefit levels for life, disability, and accident insurance. The classification reflects how likely a person is to experience injury, illness, or death related to their occupation.

Jobs that involve physical labor, hazardous environments, or high travel demands are usually placed in higher-risk occupational classes and therefore have higher premiums. In contrast, office-based or administrative jobs are considered lower risk and receive more favorable rates. The classification system allows insurers to maintain fairness by matching premiums to the actual exposure of risk in different professions.

Example:

An office administrator may be classified as a low-risk occupation and pay a lower disability insurance premium, while a construction worker, who faces a greater risk of injury, would fall into a higher-risk class with higher premiums for the same amount of coverage.

What to Watch For:

Be accurate when describing your job duties on an insurance application. Misrepresenting or oversimplifying your role can lead to incorrect classification and potential claim issues. If your occupation changes after you purchase coverage, notify your insurer, as your classification may affect eligibility for future claims or renewals.