"I am now working with a different employer though have the same income. Do I need to set up a new Income protection policy if I am no longer working with the financial planner who set up my previous policy?"
- Question from Matty in Sydney
Top answer provided by:
Dishna Wijenayake
Hi Matty,
You don’t need to cancel your income protection policy simply because you changed your financial adviser. You are the life insured on your income protection policy. Therefore, you can continue the policy with your current insurer irrespective of your relationship with the financial adviser.
However, as your employment has changed since the current policy was taken out, it is prudent to review this policy to ensure that it remains suitable.
I have summarised some key points below;
Was the policy provided by your previous employer and is it transferrable?
If your income protection policy was provided by your previous employer this may or may not continue after you leave . This is something you need to verify with your insurer. Some Insurers would allow members to transfer these policies across once they leave their employer. However, terms of the policy and premiums may change. Therefore, I recommend contacting your current insurer as soon as possible to verify above.
Has your ‘occupation’ changed?
You mentioned that your income has stayed the same but how about your occupation? Are you still performing the same duties? If the policy was underwritten, you would have disclosed your duties/tasks at the time when you applied for cover. If you have a default policy, this will depend on the terms and conditions provided by your insurer.
If your occupation has changed, the insurer should be notified. Some insurers would require you to submit a change of occupation form to make appropriate changes. It is important to make sure the insurance provider has up to date information.
Have you reviewed your insurance policies recently?
Your occupation and income may stay the same but how about your personal circumstances? Have you reviewed your policies recently? Are your insurance policies still in line with your insurance needs? Therefore, reviewing your current policies is recommended.
Changes to Income protection policies from 1 October 2021
On 1 October 2021 some significant changes were made to income protection policies. As a result, some of the features and benefits of your current policy may no longer be available and you may lose benefits by cancelling your policy. Therefore, I recommend speaking to a financial adviser to ensure no benefits are lost prior to making any changes.
To conclude, you do not need to cancel your existing income protection policy because you no longer have a relationship with your previous financial adviser. However, I strongly recommend speaking with a financial adviser prior to making any changes to your existing income protection policy to get the best outcome.
While the Adviser Ratings Website facilitates the question and answer functionality, all such communications are between users and authorised financial advisers, of which Adviser Ratings has no affiliation. Adviser Ratings is not the advice provider and does not provide financial product advice and only provides information that is general in nature.
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