An individual health insurance policy contains a Change of Occupation provision.

The Change of Occupation provision allows an insurer to adjust benefits when the insured changes to a more hazardous occupation after policy issue. Choice A is correct. If the same premium would have purchased a lower benefit amount for the new, more hazardous occupati on, the insurer may reduce the benefit to the amount that premium would have bought under the new occupational classification. The purpose is to preserve fairness between the risk assumed and the premium paid without automatically cancelling the policy. The insurer does not simply increase the waiting period or deductible, because those are not the contractual adjustment method addressed by the provision. It also does not deny every claim for misrepresentation, because a later change in occupation is not necessarily a misrepresentation in the original application. If the insured changes to a less hazardous occupation, the provision may allow the insured to apply for an adjusted premium rate or greater benefit as appropriate under policy terms. The key examination rule is that occupational changes affect the amount of benefits or premium classification, not the basic validity of coverage. Study Guide References/Topics: Policy Provisions, Clauses, and Riders; Change of Occupation Provision; Individual Accident and Health Policies.