Written by · Reviewed by Smiths Insurance & KiwiSaver — licensed Financial Advice Provider (FSP712931) · Last updated 2026-08-15

What Happens to Your Insurance When You Change Jobs in NZ

Changing jobs does not cancel your personal insurance. A personal life, trauma or income protection policy is a contract between you and the insurer, so it continues on the same terms when your employment ends, and your new employer plays no part in it. What changes is everything sitting underneath the policy: your occupation class, the disability definition attached to that class, the income an income protection claim would be measured against, and any group cover your old employer provided, which normally stops when the employment stops.

Three of those run on a clock: notifying new duties, exercising a group scheme continuation option, and the length of any gap between roles.

Occupation class sets both your price and your claim test

Insurers sort jobs into occupation classes. Chubb Life defines one as "a grouping of jobs that have similar risks", assigns each insured person to a class, and shows it on the document confirming your cover (Chubb Life & Living policy document). Class is a rating input, so it moves your premium. Telling customers about a system error that dropped occupations off policies, Fidelity Life put that side plainly: the error "does not impact your coverage or insurance. It only affects how your premiums are determined" (Fidelity Life occupation class FAQs).

For income protection, class also selects the disability test you are assessed under. Under the Fidelity Life LifeProtect Income Cover wording, occupation classes 1 to 4 are totally disabled when they cannot perform at least one important income producing duty, or cannot engage in their own occupation for more than 10 hours a week. Occupation class 5 must instead be confined to home under medical supervision, or unable to perform at least two activities of daily living without adult assistance, and not working in any gainful occupation (Fidelity Life LifeProtect Income Cover wording). That is close to an any-occupation test and a much harder bar.

A move from a desk role to a site-based one, or into work involving heights, machinery or long-haul driving, is not just a repricing event: it can change the wording your claim is judged by.

Own occupation, usual occupation, regular occupation

These wordings test disability against your own work rather than any work you could do, and define it as your most recent job, not the one you held when you applied. Fidelity Life defines own occupation as "the field of work in which the insured person has trained and was engaged immediately before becoming totally disabled". Partners Life tests classes 1 to 4 against being unable to work in their usual occupation for more than 10 hours a week, or unable to perform at least 75 percent of its key tasks (Partners Life Income Cover Agreed Value benefit sheet, clause 3.1.1).

The definition follows you into the new role, which is why the insurer needs to know what it is. TPD wordings are a separate question: they vary between own occupation and any occupation tests.

Group cover ends with the job, and the window is short

Cover provided through an employer scheme belongs to the employer. A published Resolution Life workplace income protection policy states that cover stops when the person insured ceases to be employed by that employer (Resolution Life Workplace Income Protection policy, clause 26). Group life, trauma, TPD and health cover work the same way.

The feature worth knowing is the continuation option, which lets a departing member take out an individual policy with the scheme's insurer without medical evidence. Whether it exists depends on the scheme, and the deadline is short. Mercer Marsh Benefits states the application must be completed within 60 days of leaving employment, that the insurer will not entertain applications beyond that date, and that benefits are re-priced to retail rates (Mercer Marsh Benefits continuation options).

Terms carried over are not always clean: the Asteron Life continuation form states that exclusions or loadings from the employee plan apply to the personal policy, and that if you have qualified for, lodged or been paid a benefit you might not be eligible to continue some cover (Asteron Life continuation option application). And no health questions does not mean no questions: the Fidelity Life group continuation form still asks about smoking and whether you are leaving because of sickness or injury (Fidelity Life group continuation form). Ask HR or the scheme broker before your last day, not after.

Check what your income protection benefit is measured against

If your cover is indemnity based, the benefit is calculated on earnings before the claim, not the figure in your schedule. Resolution Life describes indemnity as the lower of the amount agreed at the start and 75 percent of average monthly income, based on the highest income earned over any consecutive 12 month period in the three years preceding total disability (Resolution Life Lifetrack Income Cover Total product card). Fidelity Life defines pre-disability income on the same three-year, best-12-month basis, and pays nothing unless that income is substantiated at claim time.

Some wordings react to a pay cut. Under the OneChoice income protection policy, pre-disability income is normally the average for the 12 months before disability, but if monthly income fell by 15 percent or more against the previous 12 months, the calculation switches to the 24 month average (OneChoice Income Protection policy document).

A pay rise means an indemnity benefit may be capped by a sum insured set years ago, so an increase has to be applied for; a pay cut means you may be paying for a benefit you could not fully claim. The trade-off is set out in our guide to agreed value versus indemnity cover.

A gap between roles is the risky window

Two insurers apply the same 12 month rule. Fidelity Life's unemployment limitation assesses a claim as occupation class 5 if the insured person was unemployed or on unpaid leave for more than 12 months immediately before total disability. Partners Life goes further: temporary unemployment or employer-approved leave without pay beyond 12 consecutive months moves the life assured to class 5 regardless of the schedule, and the waiting period becomes the scheduled one or 13 weeks, whichever is longer.

Between roles, suspending is usually safer than cancelling, which discards underwriting you already hold. Fidelity Life's Leave Without Pay Benefit suspends cover and premiums for up to 12 consecutive months for reasons including involuntary unemployment, with no claim payable while suspended and reinstatement conditional on returning to the usual occupation for 25 hours a week for a month. Chubb Life allows a policy in force for at least three months to be put on hold for financial hardship, employer-approved leave, or time outside New Zealand, again with no claims while on hold. OneChoice waives three months of premiums after involuntary redundancy, but not where you resigned, took voluntary redundancy, were self-employed, or worked seasonal or temporary roles.

Contracting also changes your ACC position

Moving from PAYE employment to self-employment puts you on ACC CoverPlus automatically, with levies from your IR3 earnings and Classification Unit, and weekly compensation of up to 80 percent of taxable income from your most recently completed financial year (ACC cover for self-employed). CoverPlus Extra fixes the cover amount in advance, which suits fluctuating income (ACC CoverPlus Extra). ACC responds to accidents, not illness, the gap income protection and ACC top-ups are built around.

What to tell your insurer, and when

Your duty to give correct information attaches at defined moments rather than running continuously. Chubb Life requires you to tell the insurer when information changes "before your cover starts or before any change to this policy takes effect". The Contracts of Insurance Act 2024 keeps that structure, requiring a consumer to take reasonable care not to make a misrepresentation before a consumer insurance contract "is entered into or varied" (Contracts of Insurance Act 2024, section 3), and takes effect on 15 November 2027 (MBIE insurance contract law review). A wrong statement is not automatically fatal: under section 4 of the Insurance Law Reform Act 1977, a life policy cannot be avoided for a misstatement unless it was substantially incorrect and material, and made either fraudulently or within the three years before the policy is avoided or the life insured dies (Insurance Law Reform Act 1977).

Insurers treat an occupation change as a policy change: OneChoice lists changing your regular occupation duties among the changes confirmed in writing. When you move roles, put these in front of your adviser or insurer:

This is general information, not personalised financial advice. Whether to vary, suspend, continue or replace a policy depends on your health, underwriting history and existing wording, and replacing cover can forfeit terms you would not be offered again.

Your next step

If you are moving roles, start with a structured look at what you hold, what your employer provided, and what changes when the job does. Start a cover check and an adviser will work through your existing policies, your continuation window and your new occupation class, then compare the market with you. You get a comparison and a conversation.

References

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