A change of employment can be a good opportunity to make sure your life insurance still fits your needs. Your personal retail policies generally continue unchanged, but insurance that sits inside your super fund can be directly affected when you switch employers.
Different employers use different super funds, and each fund has its own insurance provisions, conditions for keeping cover, and rules around when cover starts or stops. You may also have the option to continue a policy in your old fund, but only if you act early enough.
This isn’t about worrying. It’s simply about understanding what could change and the steps that help keep your protection working the way you expect.
1. Why job changes matter more than people realise
Starting a new role can create changes in:
- Income or earnings pattern
- Hours, duties or work environment
- Sick leave, salary continuance or employer-sponsored IP
- Whether you are PAYG, contracting or self-employed
- The super fund your new employer contributes to
- Whether your existing super account still receives contributions
- Whether your balance remains high enough to keep insurance active
Each of these can influence how your Life, TPD, Trauma or Income Protection cover operates.
Retail policies tend to remain stable.
Super-based insurance is where most accidental changes or losses occur.
2. Income Protection – a key area to review carefully
Income Protection (IP) is closely tied to your work pattern and earnings, so even modest changes in employment can impact how well it supports you.
Agreed value and indemnity – and why job changes matter
- Agreed value (older retail policies) is based on income at application time, though partial disability payments still consider your current earning capacity.
- Indemnity (all newer retail policies) is based on income leading up to the claim, often averaged over the previous 12 to 24 months.
A change of job can mean:
- Your income has risen and your amount insured is now too low
- Your income has fallen and you may be paying for a benefit you could not fully claim
- Your work pattern has changed (part-time, shift work, variable earnings)
- You now have more or less sick leave or salary continuance
- You’ve moved to contracting or self-employment, where income fluctuations affect claimable amounts
Employer-linked Income Protection or salary continuance
Some employers offer their own form of income protection or salary continuance.
A new employer may:
- Provide a benefit
- Provide no benefit
- Provide a benefit that is shorter, longer, or structured differently
- Require a waiting period that differs from your personal cover
These benefits can complement or duplicate your retail IP, so reviewing both together is important.
3. Life, TPD and Trauma – key checks after a job change
Is your level of cover still appropriate?
New income, debt, family responsibilities or financial goals may mean adjusting your sums insured to ensure they still match your needs.
Check where your cover is held and how it behaves
If your cover sits inside super:
- Your new employer may contribute to a different fund, which may automatically start new default insurance (or start none).
- Your existing fund may allow you to continue your current cover, even without employer contributions, by making personal contributions.
- Some funds require a minimum balance to keep insurance active.
- Rolling or closing your old super account may cause your insurance to stop immediately, without warning.
- Reinstating cancelled super insurance is often not possible on the same terms.
Understanding your options before consolidating helps avoid losing benefits you may value, especially if you have medical history or exclusions.
Consider whether your TPD definition still fits your work
A shift in job duties, hours or physical requirements may influence how your TPD definition applies at claim time.
You don’t need to dissect policy wording, but it’s worth checking that what you have still makes sense for the work you now do.
Check whether your Trauma cover still aligns with your responsibilities
If your income or family needs have changed, your Trauma cover may need a refresh to ensure it would provide realistic support during recovery.
4. Common issues people discover during a review
These are the things Australians often find only after something changes:
Insurance inside super stopping unexpectedly
This can occur due to:
- No contributions coming into the account
- Low account balances
- Inactive account rules
- Fund mergers or changes in policy terms
Cover amounts that no longer match income or debt
If income changes or new financial commitments arise, cover may drift out of alignment.
Over or under insurance in IP
Income shifts can make your benefit too small or make part of it non-claimable.
Duplicate or unwanted insurance
Two or three super funds may all hold default insurance without you realising.
Old loadings or exclusions that could be reviewed
Some health-based terms may be eligible for reassessment if your circumstances have changed.
5. Practical steps to take when you change jobs
Here’s a simple checklist to make your review easier.
1. Check your new employer’s super fund
- Will your employer pay into a different fund?
- Does that fund offer insurance?
- Do you have a choice of fund?
- Do you want to keep your existing fund and its cover?
2. Confirm your current insurance inside super is still active
- Check your balance and contribution history
- Check if inactivity rules could cancel your cover
- Confirm whether you can keep your cover by making personal contributions
3. Review your Income Protection
- Compare your new income to your insured amount
- Confirm whether your waiting period matches your new sick leave
- If you now have employer salary continuance, compare benefits and waiting periods
4. Update your Life, TPD and Trauma sums insured
Make sure your cover still reflects your income, family needs and financial responsibilities.
5. Get clarity before rolling super
Always understand the insurance impact before transferring or closing a fund.
6. Consider speaking with an adviser
They can help you understand your options, avoid unintended cancellations and adjust cover so it remains appropriate.
A quick review now keeps your protection on track
Changing jobs doesn’t mean your insurance becomes unsafe.
It simply means it’s worth checking that everything still works the way you expect.
Understanding your options early helps you stay protected, avoid losing valuable benefits, and keep your cover aligned with your life.
