What does the Change of Occupation Rider do?

The Change of Occupation Rider is a provision in an insurance policy that allows an insured to receive benefits or experience a reduction in premiums if they change their occupation. This rider is designed to adjust coverage based on the risk associated with different types of jobs. When an insured moves to a job that carries less risk than their previous occupation, this can result in lower premiums or more favorable benefits because the insurance company perceives a decreased likelihood of claims.

For instance, if someone moves from a high-risk job, such as construction, to a lower-risk job, like an office position, the insurance company recognizes that the chance of a work-related injury or claim is reduced. This change can lead to an adjustment in the terms of the policy to reflect the new risk level.

This rider is essential for ensuring that the insured does not pay excessively for coverage that may not reflect their current occupational risk, thereby promoting a fair and equitable relationship between the insurer and the insured.