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The cost of disability income insurance depends on many factors, like your age, gender, and smoking status. But did you know that your occupation plays the biggest role in determining how much you have to pay?
In this post, you’ll find out what occupation class you belong to. You’ll also learn how you can upgrade your occupation class so that you can pay the lowest rate possible for disability coverage.
What Is An Occupation Class?
Disability insurance companies group different occupations together under an occupation class. As such, every job belongs to an occupation class for disability insurance. Less hazardous jobs are grouped, while riskier ones join together to form different occupational classes. Your occupation class determines the premiums you have to pay for disability insurance.
On top of that, some disability benefits like the own occupation and residual disability riders are only available to higher occupation classes. Lastly, your occupation class can directly affect the maximum monthly benefit you can buy. For example, class 4A can buy up to $25,000/month in disability income, while class B can only buy up to $4,000/month.
In general, higher occupation classes have a lower risk of becoming disabled, require more education, and have a higher earned income. As you move down the occupation classification scale, jobs require more physical exertion, less skill, and have a higher absenteeism rate.
Most companies offer five different occupation classes from least hazardous to most: 4A, 3A, 2A, A, and B. Some also have class C, which is even more hazardous than B.
Uninsurable occupations don’t fall under any of these occupation classes. Although some of these jobs have unusual physical hazards (e.g. taxi drivers, flight attendants, martial arts instructors), some are uninsurable because of a high degree of job instability (e.g. actors, writers, models).
What is occupational category 4A?
4A occupations have the lowest degree of risk. The jobs that belong to this occupation class are highly specialized and require many years of training and education. For example, medical professionals like doctors and dentists are rated as 4A. Here is a list of some jobs that insurance companies consider 4A:
- Accountants
- Actuaries
- Architects
- Computer consultants, analysts, and programmers
- Dental specialists
- Most engineers with consulting and office duties only
- Most executives with consulting and office duties only
- Lawyers
- Optometrists
- Physicians
Did you know there’s an occupation class higher than 4A? Medical professionals, dental specialists, select professionals, and most executives with limited sales duties may pay lower rates than 4A. They can even get a higher maximum monthly benefit. Income verification is required to qualify for this higher occupation class.
What occupations fall under category 3A?
White-collar office, clerical, or light sales workers with no manual duties fall under the 3A class. Most executives and business owners directly involved in manufacturing, processing, or assembling a product or merchandise may be classified as a lower class than 3A. Here is a sample list of jobs that belong to 3A:
- Administrative assistants
- Bank tellers and managers
- Bookkeepers
- Chiropractors
- Clerks
- Librarians
- Mortgage brokers
- Occupational therapists
- Opticians
- Paralegals
- Photographers
- Physiotherapists
- Receptionists
- Speech therapists
- Teachers
- Travel agents
What is considered occupation class 2A?
Skilled specialized workers with more sales and manual duties fall under class 2A. This includes business owners whose duties include supervising or inspecting plant operations. Here is a list of sample jobs insurance companies rate as 2A:
- Acupuncturists
- Car salespeople
- Commercial realtors
- Computer technicians
- Event planners
- Farm owners
- Florists
- Health inspectors
- Home inspectors
- Insurance adjusters
- Midwives
- Registered massage therapists
- Registered nurses
- Parole officers
- Reporters
- Salespeople and clerks with sales duties only
- Social workers
What occupations belong to category A?
Category A is where skilled manual workers in the lighter trades and industries belong. Some unskilled workers with light duties and favourable working conditions would also be classified as class A. Their working conditions must not have any hazards from heat, chemicals, explosives, or heavy equipment/machinery to qualify. Here are some jobs that insurance companies consider class A:
- Bakers
- Bus drivers
- Bylaw enforcement officers
- Car mechanics
- Chefs
- Dental hygienists and assistants
- Dog trainers
- Driving instructors
- Electricians
- Mental health counsellors
- Music teachers working from home
- Plumbers
- Property managers
- Registered nursing assistant
- Residential realtors
- Servers
- Unarmed security guards
What occupations belong to class B?
Certain professions require heavy physical exertion and have the highest chance of disability insurance claims. Unskilled or manual labourers, drivers of heavy vehicles and those working in conditions like extreme heat and humidity would fall under class B. Here are some other sample jobs that belong to B:
- Ambulance drivers
- Armed security guards
- Barbers and hairdressers
- Bartenders
- Carpenters
- Cement and concrete workers
- Cleaners and janitors
- Contractors
- Drivers (long-haul or heavy vehicle)
- Drywallers
- Estheticians
- Firefighters
- Forklift and heavy equipment operators
- Garbage truck drivers
- Lifeguards
- Paramedics
- Personal trainers
- Police officers
- Prison guards
- Roofers
- Swimming instructors
- Yoga instructors
Frequently Asked Questions About Disability Insurance Occupation Class
How Do You Determine Your Occupation Class?
If your job duties line up with one of the occupation classes listed above, then it’s not difficult to determine your disability insurance occupation class.
However, some jobs aren’t listed in the occupation class schedule. In these cases, listing your job duties and the percentage of time spent performing each task would help identify your proper occupation class.
Remember, it’s the actual duties that the insurance company wants to know, not your job title. Salesperson, executive, clerk, or other general terms don’t help the insurance company understand what you do and your risk exposures.
Can you upgrade your occupation class?
Most insurance companies offer an opportunity for you to upgrade your occupation class. The main criteria they look at are your income in the past two years and the number of years of experience in your occupation.
Job stability and high income are positive signals for insurance companies. Qualifying workers experience fewer disability claims, so insurance companies reward them with lower premiums.
What if you change your job?
As your career progresses, you may work in a new occupation that is less hazardous than your previous job. In this case, you can notify the insurance company to upgrade your occupation class to a higher one. This helps you save on the cost of your disability insurance policy.
However, the opposite isn’t true. Therefore, you don’t need to notify the insurance company if you change to a more hazardous job. So you can keep paying lower costs for your disability insurance policy even though your new job may be much riskier.
What are own occupation definitions of disability?
The three main definitions of disability are own occupation, regular occupation, and any occupation. Disability insurance policies with the own occupation definitions allow people on claims to continue receiving monthly benefits even if they work in another job. Only 4A and 3A occupation classes can obtain own occupation definitions.
The next best thing for other occupation classes is the regular occupation definition. This lets you receive disability benefits as long as you are unable to work in your regular job. The regular occupation definition usually lasts two years unless you buy an extension when you first get your disability policy. The extension can be five years or until age 65 but cannot last longer than your benefit period.
If you don’t opt for the extension, your disability policy will change to the any occupation definition after two years. This means your disability income may stop if you can work in another occupation you qualify for based on your education, experience, and training, even if you can’t do your normal job. Disability insurance products from group coverage all have the any occupation definition after two years of a disability.
What Occupation Class Do You Belong To?
Many jobs don’t fall neatly into the list of occupations from disability insurance companies. Self-employed individuals and business owners who wear many hats will have difficulty identifying their occupational classes. Remember that your actual duties determine your occupation class, not your job title.
Not all disability insurance companies treat every occupation the same. Talk to us to find out which insurance company puts you in a higher occupation class, benefiting you from lower costs and better disability benefits. Contact us at info@briansoinsurance.com or 604-928-1628 for a free consultation and get the disability coverage you need today.
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While we make every effort to keep our site updated, please be aware that timely information on this page, such as quote estimates, or pertinent details about companies, may only be accurate as of its last edit day. Brian So Insurance and its representatives do not give legal or tax advice. Please consult your own legal or tax adviser. This post is a brief summary for indicative purposes only. It does not include all terms, conditions, limitations, exclusions, and other provisions of the policies described, some of which may be material to the policy selection. Please refer to the actual policy documents for complete details which can be provided upon request. In case of any discrepancy, the language in the actual policy documents will prevail. A.M. Best financial strength ratings displayed are not a warranty of a company’s financial strength and ability to meet its obligations to policyholders.
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