85. An individual health insurance policy contains a Change of Occupation provision. If the insured experiences a loss in a more hazardous occupation than when the policy was issued, the insurance company may:
Answer: A
The insurance company may adjust benefits to the amount the premium provides for the new occupation.
When an insured individual takes on a more hazardous occupation, the insurance company has the option to adjust the benefits according to what the premiums would cover for that new level of risk.
A) adjust benefits to the amount the premium provides for the new occupation
This option is correct because a Change of Occupation provision allows the insurer to modify the benefits payable under the policy based on the risk associated with the new occupation. If the individual has moved to a more hazardous occupation, the insurer will adjust the benefits to align with the premium that corresponds to that increased risk.
B) increase the waiting period to adjust for the occupational difference
This option is incorrect as the Change of Occupation provision does not typically involve altering the waiting period for claims. Instead, it focuses on adjusting the benefits based on the risk level of the new occupation.
C) deny any claim on the basis of misrepresentation
This option is incorrect because while misrepresentation can lead to claims denials, the Change of Occupation provision specifically addresses adjustments in benefits rather than denying claims outright. Denial would only occur under specific circumstances of misrepresentation, not merely due to a change in occupation.
D) increase the deductible to adjust for the occupational difference
This option is incorrect as the Change of Occupation provision does not involve increasing the deductible. Rather, it allows the insurer to modify the benefits available based on the risk associated with the new occupation, not the deductibles.
Conclusion
In summary, option A is the only correct choice as it accurately reflects the function of the Change of Occupation provision, which is to adjust benefits according to the risk level of the new occupation. The other options either misinterpret the provision's intent or suggest actions that are not typically associated with this clause in the policy.