Can I get Income Protection Before Starting a New Job?

Getting Income Protection Between Jobs

If you’re considering a career change, congratulations!

Job hopping can be scary but incredibly rewarding.

Whether you’re just starting in your career or are looking for a new challenge, here are some things to consider when changing jobs.

1. How will a new job affect your health?

It’s important to consider how the job you’re applying for will affect your health.

This is especially important if

• you’ll be under considerable stress from a pressured environment and long hours
• you’re applying for work that requires you to stand or walk for long periods
• if you’re working in a job that requires manual labour

Think about simple things like the commute.

Is it longer or shorter?

If it’s much longer, does that mean you won’t have time to exercise or eat properly?

Once you get home, is the new you just about capable of flaking out on the couch with a takeaway menu and a bottle of booze?

You might be earning more…but for what – to buy things you don’t need to impress people you don’t even like?

I worked in London for a time in my 20s – a frazzled City boy making decent wedge, but I was broke all the time because I was hanging around with a crowd who were earning even more. Keeping up with the Jones’ is an expensive habit.

Before accepting a job offer, consider if you’re actually a good fit for the role and company.

Will your happiness improve or just your bank balance?

If you’re not sure it’s the best job for you, you’ll be less excited and less motivated to perform at your best. If a job is too passive or impersonal, you might feel like you’re not learning as much as you could be, and this could lead to burnout and frustration.

2. What benefits are you leaving behind?

This is über important, especially if you have any underlying health conditions:

If your current employer is generous enough to offer death in service (work-life insurance) or income protection, make sure you can get similar cover before you jump ship.

I have had many discussions with panicked clients who had all the benefits in their previous job only to eventually find out they had nothing in their new one.

It’s an an easy mistake to make; you probably aren’t even aware of the cover you have at your current job, but if you’re thinking of leaving, you better find out quick smart!

I can’t overemphasise how important this is.

You’re moving to a new job, presumably for a higher salary and therefore your new employer will have high expectations.

High expectations = high pressure

High pressure without the expected results will make you work even harder.

Pushing too hard will lead to burnout.

Something will have to give.

And this is where your income protection saves the day.

Your policy will replace 75% of your income and continue to pay you until you get back to your job.

Without income protection, your income will fall to just €220 per week.

And if you’re moving into a self-employed contractor role your income could drop to zero.

So please, don’t leave your current job without first finding out what the insurance benefits are at your new place.

You might find these articles useful:

Income Protection for the Self-Employed & Freelancers

Income Protection for Contractors

3. What if your new job doesn’t offer Income Protection or Life Insurance?

If you’re in great health, then it’s straightforward, you can buy your own policies. But if you’re in your 40s or 50s, the premiums can be tasty.

Let’s say you’re a 45-year-old Software Engineer, and the new gig offers a base salary of €100k but only offers sick pay for the first 13 weeks; after that, you’re on your own.

You have some savings, so you feel you could get through 26 weeks without an income, so you consider this type of policy

Cover Amount: €64,444 per year until age 65.

Occupation: Software Engineer

Deferred Period: 26 weeks

Monthly Premium: €185 After-tax relief: €112

In your previous job, you had life insurance to the value of four times your income.

You want to replicate that cover:

Cover Amount: €400,000 over 25 years.

Monthly Premium: €60

That’s a net premium of €172 per month, so something to consider before you hit send on that “thanks, I’m off” email.

4. What if you have an underlying condition?

Let’s say you are a cancer survivor.

There is a small chance of getting a new income protection policy, but there will be a cancer exclusion.

So if you’re unfortunate enough to suffer a recurrence, you won’t be able to claim.

However, you may already be fully covered through your current employer’s group income protection scheme.

That is peace of mind that your money, literally, can’t buy.

One of my clients had a similar story to this. She was working in a large legal firm when she was diagnosed with breast cancer.

Fast forward ten years and a management consultancy firm headhunted her, but the role didn’t offer income protection.

She was understandably reluctant to take the new job without having income protection. Fortunately, as her tumour was early stage and quite some time had passed, we managed to get her full income protection without any exclusions.

5. What happens if I’m “between jobs” and make a claim?

Most insurers will refuse your claim because they require you to be in full-time employment for a valid claim to arise.

However, some insurers will offer you Essential Activities Benefit. In other words, if you are seriously incapacitated, they will pay out €15,000 per year until you get back to work.

Over to you

I’ve nowt left to say only “tread carefully”.

It costs nothing to investigate your income protection options while you’re in your current job.

But imagine learning that you don’t have income protection cover in your new job just after you find a lump or have a headache that just won’t shift.

If you would like to see some costings for income protection, feel free to complete this questionnaire, and I’ll check things out for you in confidence.

Best of luck with the job hunt!

Nick

Nick