What provision allows an insurer to adjust policy benefits and rates if the insured changes to a more hazardous occupation?

The provision that allows an insurer to adjust policy benefits and rates when the insured transitions to a more hazardous occupation is known as the Change of Occupation provision. This provision typically stipulates that if an insured takes on a job that presents a higher risk of injury or illness, the insurance company has the right to reassess the policy. This reassessment may involve altering the premium rates or modifying the coverage limits to reflect the increased risk associated with the new occupation.

Understanding this provision is crucial, as it protects the insurer from potential losses that could arise from covering individuals in higher-risk positions without adequate adjustments to their policies. By having this provision in place, insurers ensure that they can manage the risks involved in providing coverage, maintaining the financial stability of the insurance pool.

In contrast, other provisions like the Waiver of Premium does not relate to occupational changes; instead, it allows the policyholder to skip premium payments under specific conditions, usually involving disability. The Reinstatement provision pertains to the process for reinstating lapsed policies and does not address changes in occupation. Lastly, the Exclusions provision details specific circumstances or conditions under which coverage is not provided and is not directly related to occupational changes.