What does the term "Change of Occupation" refer to in health insurance policies?

The term "Change of Occupation" in health insurance policies refers specifically to the insurer's option to adjust policy benefits or premium based on the insured's occupation. When a policyholder changes their occupation, especially to one considered more hazardous, the insurer may have the right to modify the terms of the insurance policy. This could include adjusting the premiums to reflect the increased risk associated with the new occupation or altering the benefits provided if the new role affects health outcomes.

Understanding this context is crucial because occupations can significantly impact health risks; thus, insurers need to ensure that the coverage offered aligns with the actual risk. The ability of the insurer to make these adjustments helps protect them against underwriting losses and ensures that policyholders are covered appropriately according to their occupational risk levels.