"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:
Great question, it may sound like a fairly easy question but essentially there are a number of factors involved that makes my answer somewhat vague.
I need to know about the insurance policy that the previous adviser set up for you as there are different types and offerings and each one can change what you need to do depending on the insurance, but I’ll break it down to different types of insurances:
Retail Insurance policy
This is the most likely the type cover you have if it was set up by your previous adviser.
This is cover that is fully underwritten and Guaranteed Renewable, which means that the terms of an insurance protection contract cannot be withdrawn, downgraded or varied by the insurer if the health of the insured declines for any reason, or if your lifestyle risk increases so in your circumstance there is no need to tell the insurer things like changing occupation and only should be changed if benefits you for example changing from a high risk occupation to a low risk e.g. from a paramedic to office based admin, and in this case your premiums would reduce.
If it is a retail policy though, and you are no longer in contact with the servicing adviser you can have the policy transferred to a new adviser so that you can still have your policy reviewed, as your current cover may no longer suit your current needs and may need to be adjusted or altered.
Group Insurance policy
There is a possibility that your adviser set up a group insurance policy but a little less likely.
This is cover that is usually set up with and owned by a superfund and is either offered as default cover or tailored. If it is tailored, then it may be partially underwritten (less questions than retail).
In terms of definitions they vary widely depending on the fund as the superfund is the one who writes the definitions and then they either act as insurer themselves (like Qsuper) or they put the policy out for tender to insurance companies who will underwrite the policy (like REST who are currently using TAL).
If this is how your policy is set up, then yes you might need to look at updating your occupation if it is a significant change from what you were doing as it is most likely is not a Guaranteed Renewable policy (not saying they don’t exist, but I have never seen or heard about a group insurance policy that has Guaranteed Renewable terms).
General Insurance policy
I doubt that your financial adviser has set you up with an accident and sickness policy as you have said it is income protection but just to be on the safe side. These policies are usually offered by direct general insurers (like AAMI or Chubb) or insurance brokers.
These policies are usually quite limited and are much like the group insurance policies in terms of definitions but the difference is they are usually owned by the insured rather than a superfund and they tend to not be Guaranteed Renewable policies so you would need to tell the insurer your new occupation (I have seen some old ones that are Guaranteed Renewable, but they are few and far between).
So essentially Matty the best answer I can give you is maybe, sorry I can’t give you a yes or no answer as your question doesn’t have enough information to be straight forward.
The best advice, I can give you is have your insurances reviewed by a financial adviser who knows insurance (not all advisers offer insurance advice) that way you will know if they are still right for your current circumstances and if your policy will need adjusting, plus you will have an adviser to help you in the future as well for claims and alterations.
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