Life Insurance

Do You Really Need to Check Your Life Insurance When You Change Jobs?

21 May 2020

Life Insurance by Life Stage

The choices you make today can impact your long-term health, wealth and happiness. Understand the important role Life Insurance can play in key life events.

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The time to change your work environment has arrived!

You’re eager, motivated, and somewhat anxious. The new challenge is around the corner and you’re wondering whether you’ll fit into the new workplace.

But the new turn of events can cause a commotion in your mind, so you may overlook a few things.

For example, changing jobs could also mean that it’s time to tweak your life insurance policy. Naturally, it’s not only your work environment that changes. Your life can also become different as a result.

Therefore, it’s vital to check whether your policy needs updating. Otherwise, you may end up being underinsured. And in the event of a claim, the payout could be lower than what you’d expect.

It’s your responsibility to consider your needs and to look to prevent this potential outcome.

There are various reasons to change your life insurance arrangements after you move to another job. The same applies if you get a big promotion at your current employer. And this article will list some of the reasons why it’s critical to check your life insurance needs at such a time.

Reason #1 – Your Previous Insurance May Be Gone

It may be the case that your employer sorted out your life insurance for you as part of your employment arrangement.

If you were to move jobs, or were made redundant, you may not want to – or have the opportunity to – continue to spend your money on the life insurance your previous employer may have put in place. Instead, look for a life insurance company that enables you to tailor a policy to fit your needs.

Additionally, you should check whether your old job provided you with cover under some sort of group life insurance policy. If so, you may wish to consider switching to a policy that offers tailored, individual coverage.

Reason #2 – Your Life’s Circumstances May Change

A change of job brings plenty of other changes to the table.

There are a number of things to consider.

For example, you could be moving to a bigger home. That would also mean an increase in your housing expenses. Moreover, you may need to enrol your children in a more expensive school.

If something happens to you and you don’t adjust your life insurance, the coverage may well be lower than what’s needed. This can put your loved ones in a tough spot if a claim is made.

Reason #3 – Your Lifestyle Changes

A higher salary can lead to an improved lifestyle. You may not notice it right away, but these small changes will become apparent over time.

Because of this, you may be driving a better car, eating healthier, and eating out at fancier restaurants. In time, it’s natural that your family will get accustomed to the better life.

But, what happens if you can’t provide for them anymore? Your old life insurance might only be enough to cover the kind of life that you had before the new job.

And that’s just the start.

If something happens to you, your loved ones would need a period to recover. The unfortunate event would throw their lives off balance and your life insurance policy is supposed to help prevent that.

But if your coverage is lower than required, your family wouldn’t be able to maintain their present lifestyle. Their life is already in turmoil and any financial pressure they experience would only make it worse.

Not to mention, a new job could propel you to make substantial lifestyle decisions. For example, you may take out a new mortgage or car loan. What happens to the debt if you couldn’t work as a result of an illness or injury, or worse still, you were no longer around?

Reason #4 – You May Change Your Super Funds

Changing jobs could often result in choosing a new superannuation fund. Some people take this opportunity to start with a new super fund that’s better suited to their present circumstances.

You’ll probably have a chance to change your fund, too. If you do, you should notify your employer and ask for the required paperwork. Afterwards, future employer contributions will be going to this new fund.

But here’s an important part. It’s often the case that your new super fund will come with life insurance.

You’ll need to make sure you understand how much this is, how much this is costing you and what you’re covered for. You may be surprised that it’s not what you thought it may be.

Many people find that a life insurance policy ‘outside’ their super fund provides more flexibility, and clarity in the event of a claim.

Reason #5 – Your Risk Factors May Change

Your personal risk factors affect your life insurance policy. Most insurance companies will ask you for the details of your work environment, for starters.

It’s a given that some jobs are riskier than others. And if you’ll be working in a riskier environment, this can increase your premium due to the higher risk factors.

But it also goes both ways. Working in a safer environment could, in turn, lower your premium.

Keep in mind that you should always inform your life insurance provider if you’re changing your occupation. If you don’t, some insurers may reject the claim, or the claims process could become severely drawn out.

Also, keep in mind that insurance providers generally have a legal right to reject or reduce a claim if they can prove that you lied about certain risk factors.

A New Challenge Requires A Policy Review

Normally, your life insurance premium follows your professional growth. That’s why you need to pay attention to your coverage after any changes in employment.

If you’re ready to get income protection insurance or to consider other life insurance products, you can start by contacting NobleOak. Our Life and Income Protection covers have won Canstar awards for several years running.