What could be a consequence of failing to disclose a job change that increases risk?

When a policyholder experiences a job change that increases their risk profile, such as moving to a higher-risk occupation, the implications of failing to disclose this information can be significant. The correct answer highlights that benefits may be significantly reduced due to the insurer's reassessment of risk based on the new job details.

Insurance policies are typically based on the principle of utmost good faith, meaning that all material information must be disclosed accurately when applying for coverage. If an individual fails to inform the insurer about a change that elevates their risk, the insurer may reassess the policy terms. This reassessment can result in a reduction of benefits to align with the new risk level or even coverage limitations that were not present prior to the job change.

In some cases, if the insurer determines that the material change was not disclosed, they might choose to modify the conditions of the policy to mitigate risk, which explains the potential for significantly reduced benefits. This reinforces the importance for policyholders to keep insurers informed of any changes that may affect coverage.