Written By Caitlin See
Long-term disability insurance can be a financial lifesaver if you experience an injury or medical condition that prevents you from working. Disability policies are custom to the individual.
Insurance carriers consider your age, gender and medical history. But your job also matters when determining your coverage and premiums — specifically your disability insurance occupation class.
What are disability insurance occupation classes?
Disability insurance companies use historical claims data to determine your level of risk for filing a disability claim. This, in turn, influences the cost of disability insurance. One way they assess risk is by grouping policyholders by occupational classification.
For doctors, dentists and other medical professionals, occupation classes are broken down by medical or dental specialty. Generally speaking, invasive specialties (i.e., those that perform surgeries or complex procedures) fall into a higher risk category. Therefore, they’ll typically pay higher premiums than generalists or other non-invasive professions.
Disability insurance occupation classes: Rating system
When classifying physicians into occupation classes, most disability insurance carriers use a classification system that includes 2P, 3P, 4P and 5P ratings. However, there are other occupation class rankings, depending on the type of profession.
For simplicity, we’ll stick to examples that represent the rating system that’s common for medical and dental specialties. Ranging from highest to lowest risk:
- 2P = Highest risk
- 3P = High risk
- 4P = Moderate risk
- 5P = Low risk
The lower the occupation class number, the higher the risk. Therefore, occupations with a 2P rating have the highest risk of filing a disability claim. But most medical specialties fall into the 3P to 5P range.
For the most part, invasive medical specialties are grouped as 3P, with non-invasive occupations receiving a 5P or 4P.
Example disability insurance occupation classes
Each insurance company treats occupation classes differently. You might receive a lower or higher risk rating than shown below, depending on the company and your specific job duties.
- 3P occupation classes include OB/GYNs, orthopedic surgeons and pain management specialists.
- 4P occupation classes include urologists, endodontists and interventional radiologists.
- 5P occupation classes include pediatricians, family practice doctors and non-invasive dermatologists.
These are just a few examples of low-, moderate- and high-risk occupation classes. Occupation classes can vary between insurance companies and change over time based on new data.
For example, physical therapists usually receive a 2P rating due to the physical nature of their job. But at least one insurance carrier classifies them as less of a risk.
It’s best to speak with an independent insurance agent about your specific specialty.
How your occupation class impacts your policy
Your occupation class affects many aspects of your disability policy, including:
- How much you’ll pay. The more high-risk your specialty is, the more your disability premiums will be.
- How much you’ll receive each month. Your disability benefits might be capped based on your occupation class.
- What type of coverage you’re eligible for. Your occupation class will impact the definition of disability for own-occupation coverage.
- If there are policy limitations. Occupation class plays a role in certain coverage options. For example, emergency room physicians, anesthesiologists and pharmacists might be limited to up to 24 months of mental/nervous and substance abuse disorders coverage.
- If you qualify for a higher maximum benefit. Most insurance companies allow a maximum benefit amount of $15,000 to $30,000. But depending on your occupation class (and other factors), you might have the opportunity for a higher benefit.
Keep in mind that disability insurance can be a complex beast. There’s more to choosing a policy than just knowing what occupation class the insurance carrier matches you with.
Get the disability income insurance you need
Your occupation class is just one factor in determining your disability coverage options and overall costs. Other underwriting factors include your age, gender, state of residency, medical history and lifestyle choices, such as tobacco use.
Additionally, your disability insurance policy structure and discounts will impact the cost of disability insurance. This includes important decisions related to your monthly benefit amount, benefit period, elimination period and policy riders.
Fill out the form below to receive custom quotes for disability insurance with an own-occupation definition.
Compare disability insurance quotes and save
SLP Insurance will find you the best price on own occupation coverage, even if it's not with us. Fill out the form below for a quote with up to 30% discounts.
FAQ: Occupation class for disability insurance
Disability insurance companies group professions into occupation classes to assess their risk of filing a disability claim. Generally, the higher the risk, the higher the premiums.
Insurance carriers use a profession’s job duties to determine their occupation class. The goal is to use these occupation classes, along with other risk factors, to predict the likelihood of filing a disability claim.
Your occupation class is determined at the time of application, not at the time of your disability claim. You can continue to receive more favorable rates that come with a low-risk occupation class even if you change to a different occupation with a higher risk classification at a later date. Note this might not hold true if you exercise a future purchase option or make other changes to your policy.
