Life insurance when you change jobs

Group insurance is a genuinely good benefit and a bad foundation. It is usually issued without individual health questions up to a set level, which means people with health histories are covered under it who could not buy the same cover personally. That is exactly why losing it matters so much: the cover was available because of where you worked, not because of who you are, and the next employer’s scheme may not accept you on the same basis.

The mechanism most people miss is the continuation option. Many New Zealand group schemes allow a departing member to take out an individual policy without full medical underwriting, provided they apply within a limited window — often measured in weeks — of leaving. It is written into the scheme documentation and almost never mentioned in an exit conversation.

The second issue is occupational. Moving from an office role to a hands-on one, or into a job with a hazardous element, changes how an insurer views you. For life cover that is usually minor. For income protection and TPD it can change the price, the class and the definition under which a claim would be assessed.

1. 1Before you resign, ask HR for the group scheme documentation and the sum insured you currently hold.
2. 2Ask specifically whether a continuation or conversion option exists and how long you have to exercise it.
3. 3Find out what the new employer provides, whether there is a waiting period, and whether it covers pre-existing conditions.
4. 4Keep every personal policy in force through the transition. Do not cancel anything until the new position is clear.
5. 5Tell your adviser about the occupation change, particularly if the physical demands or the risk profile differ.
6. 6Review income protection against your new salary once you have started.

If you are moving to self-employment

Leaving employment for contracting or your own business removes the group scheme, removes sick leave, and changes how your income will be assessed for any future claim. Arrange personal cover before you resign, while you still have a stable income to prove and an employer’s scheme to convert. Doing it afterwards is harder and, if your new venture takes time to show income, considerably harder again.

These are the details that decide whether the cover does what you expected. Read them before you compare on price.

• The exact deadline on any group continuation option, which is measured in weeks and is not extended.
• Whether the new scheme has a qualifying period or excludes conditions you already have.
• Whether your occupation class changes and, if so, whether your existing policy needs to be notified.
• Whether income protection is indemnity, in which case a period of lower earnings between roles affects a claim.
• Whether a new employer’s cover is life only, and whether income protection and trauma are missing entirely.
• Whether a redundancy benefit on any personal policy has a qualifying period that restarts.

Every New Zealand insurer writes cover through a job change to its own wording, and the words are where the money is. Two policies that look identical on price can pay very differently when it matters. Closing that gap is the entire job of an adviser.

• Finding the continuation option in group documentation, which employees rarely have access to or read.
• Re-rating an existing policy when the occupation changes, in either direction — some moves reduce the premium.
• Building personal cover before you leave, while you are still healthy and still employed.
• Reviewing income protection after a salary change so the benefit still bears a sensible relationship to your income.

There are three ways to buy life cover in New Zealand, and they are not equivalent. You can buy direct from one insurer, which means you see one product range and one underwriting appetite. You can buy through your bank, which usually means a single insurer’s product sold under the bank’s brand, often with narrower definitions. Or you can go through an adviser, who quotes several insurers at once and is required to put your interests first.

The premium you pay is the same either way. Insurers build adviser commission into their pricing whether or not an adviser is involved, so going direct does not get you a discount — it just removes the person whose job is to argue your corner at application and at claim time.

• An adviser can see which insurer is currently taking your health history on standard terms, and which one will load or exclude it.
• An adviser can structure cover across two insurers if that produces a better outcome than putting everything with one.
• An adviser handles the underwriting back-and-forth, and is the person who chases the claim when a family is least able to.
• An adviser has to document why the recommendation suits you, which is a written record you can hold them to.

We are a referral service, not an insurer. We do not quote premiums and we do not sell policies. What we do is put you in front of one licensed New Zealand adviser who can compare the market properly.

1. 1

   You tell us what you are looking at

   The form takes about a minute. Nobody asks for your medical history on a web form — that conversation happens with the adviser, properly, and only once you have decided to proceed.

2. 2

   An adviser calls you

   A licensed New Zealand adviser talks through your situation: who depends on you, what you owe, what you already have in place, and what you are actually worried about.

3. 3

   They compare the market

   The adviser quotes across the major insurers, checks which of them will take your health history on the best terms, and puts the options side by side in writing.

4. 4

   You decide, in your own time

   There is no obligation and no cost to you. If the answer is that you already have enough cover, a good adviser will tell you that.