Risk classification determines the premium charged, type of policy, riders available and the overall limits. Therefore, it is necessary that proper information be obtained from the prospect to accurately determine the risk class.

Job Duties Versus Job Title

Duties, not title, determine the proper risk class. Manual duties, multiple jobs, frequent travel and any unusual hazards, such as location of job site (offshore, mine) or types of material handled (explosives), all have an impact and should be explained thoroughly on the application.

Factors Affecting Class

In addition to the duties, other factors that affect class include:

• Claims experience;
• Unstable or declining industry;
• Competition;
• Health risks;
• Moral hazards; and
• income.

Income documentation will be required on all risks, except those who qualify under the Special New Professionals/Student Issue and Participation Limits.

General Occupation Class Descriptions

The Occupational Classifications fall into nine classes. The "M" classes are for individuals in the health care industry. These professionals include, but are not limited to pharmacists, certified registered nurse anesthetists, dentists, physicians, psychologists, psychiatrists and nurses. The "A" classes include non-medical professionals, executives, and technical and clerical workers, in addition to light manual laborers and those in more hazardous occupations involving manual duties.

5M

This class includes select medical occupations with non-invasive duties such as cardiology, general practice, pediatrics and radiology. (Refer to ON-Net for AMA Recognized Medical Specialties.)

4M

This class includes select medical occupations with invasive duties such as endodontist, neurologist, orthodontist, surgeon and those working in vascular medicine. (Refer to ON-Net for AMA Recognized Medical Specialties.)

3M

This class includes general dentist, anethesiologists, surgical assistants, critical care medical practitioners, podiatrists and certified registered nurse anesthetists. (Refer to ON-Net for AMA Recognized Medical Specialties.)

5A

This class includes non-medical professional and executive occupations with the most favorable experience, where most work is performed in an office setting with minimal travel, there is no direct supervision of persons with manual duties, and the salary has been $100,000 or more per year for the last two years. This class includes CPAs, attorneys, actuaries, engineers and most PhDs.

4A

This class includes other non-medical professional and executive occupations, which have exhibited favorable experience and have had salaries ranging from $40,000 to $60,000 per year for the last two years. Some occupations in this class require a higher salary depending on job functions. This class includes computer systems analysts/programmers, consultants, manufacturing representatives, small animal veterinarians and teachers/guidance counselors.

3A

This class includes some types of sales duties and semi-professional, technical and managerial occupations. In many cases, they are "office duties only" occupations such as buyer, claims adjuster, dietician, and optician.

2A

This class includes most technical, non-hazardous occupations involving special skills such as clerical, technical, scientific, or supervisory positions (no manual work). It includes chiropractors, dental assistants, photographers and surveyors.

A

Class A generally involves people who perform light manual labor or supervisors who may do manual labor on occasion. Examples include mechanics, machine operators, diamond cutters, and electricians.

B

Class B generally includes most hazardous occupations involving manual labor and/or where there is an increased chance of an accident. Examples include butchers, tree surgeons, welders and bricklayers.

NI

This class of occupations is not insurable and includes air traffic controllers, commodity brokers, law enforcement officers, pilots and unskilled workers.

NOTE: When there is a discrepancy with a person with two occupations, the lower occupational class will apply.

The Managerial Duties Endorsement (Individual Disability Income Policy Only)
Classes: 5A, 4A, 3A & 2A

This endorsement may be used by the underwriting department to upgrade a lower non-medical occupation to a higher non-medical occupation. This endorsement would allow for better pricing and possibly enhanced riders. Manual duties must comprise no more than 25 percent of the total business activities.

This endorsement changes the definition of the occupation in the contract to cover only managerial duties and not manual duties. The following definitions explain what is entailed in each.

• "Managerial Duties" means the sedentary administrative functions of the insured's regular occupation.
• "Manual Duties" means functions that require physical activity. Physical activity includes, but is not limited to, operating machinery, driving a vehicle, climbing, bending, stooping, kneeling, lifting, crouching, crawling, pushing and pulling.

  NOTE: This endorsement will not be used to accept what are otherwise not insurable occupations.

  For more information on occupation classes, see the Disability Income Marketing Guide (Form 8722) Rev. 3/10, or the DI software for guidance. All businessowners with 20 percent or more interest must be classified using the illustration software. It measures the factors that influence the quality of risk such as age, income, amount of time owning the business, and number of employees. High-quality risks will be classified more favorably than the occupation class chart indicates, and lower-quality risks will be rated less favorably.

To use the matrix, you first determine the appropriate class using the traditional occupation class chart found in the Marketing Guide or computer software listing. Second, determine the adjustment factor for each category (age, years owning, income, number of full-time employees). Third, determine the total adjustment factor and adjust the occupation class as indicated. Refer to page 25 of the Marketing Guide for a list of occupations that are ineligible for upgrade consideration.

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Ohio National is not affiliated with, nor does it endorse or sponsor, any particular prospecting, marketing or selling system.

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