Among the following profiles, who would likely pay the highest premium for a disability income policy, all else being equal?

• A. Age 40, welder, tobacco user
• B. Age 50, office manager, non-smoker
• C. Age 30, teacher, non-smoker
• D. Age 25, construction worker, non-smoker

Answer: (A)

Premiums for disability income policies reflect the insurer’s risk, and the main factors are age, health (including tobacco use), and occupation risk. The profile that would pay the highest premium is the one with the greatest combined risk. A 40-year-old who works as a welder and uses tobacco brings together two high-risk elements: a physically demanding, injury-prone occupation and tobacco use, both of which raise the likelihood and potential duration of disability. The other profiles—older but non-smoking office worker, younger non-smokers in teaching or construction—have either less risky occupations, no tobacco use, or both, which lowers their overall risk despite age differences. Therefore, the 40-year-old welder who uses tobacco represents the highest overall risk, leading to the highest premium.