How to protect your cover—and your future—during uncertain times
In today’s rapidly changing job market, no role is 100% secure. Whether you’ve recently been made redundant or you’re concerned about potential layoffs, it’s important to know how losing your job might affect your private health insurance, and what steps you can take to protect yourself.
✅ Key Takeaways
- You may be eligible to suspend your private health policy temporarily without losing future benefits.
- Redundancy insurance can help you maintain coverage and pay essential bills if you’re involuntarily unemployed.
- You can remain uninsured for up to 1,094 days without affecting your Lifetime Health Cover (LHC) loading.
1. Redundancy Insurance: Your First Line of Defence
If you’re the primary income earner in your household, redundancy insurance (unemployment cover) can offer crucial protection. Although relatively new in Australia, more insurers are now offering this benefit due to increased demand and market competition.
What does it do?
Redundancy insurance provides limited financial assistance in the event you lose your job involuntarily. Depending on the policy:
- You may receive ongoing payments to cover key expenses such as mortgage.
📌 Note: Redundancy cover only applies to the house owner with owner occupied mortgage.
Why it matters:
It’s difficult to build emergency savings when you’re managing daily expenses. This type of insurance provides peace of mind during job transitions—helping you avoid losing important coverage when you need it most.
2. Can’t Afford Your Premiums? Suspension May Be an Option
Many private health insurers allow members to temporarily suspend their policy due to financial hardship.
Benefits of suspending your cover:
- No premiums during suspension
- No need to re-serve waiting periods after reinstatement (if managed properly)
- Retain your LHC status and continuity of cover
However:
- You cannot claim benefits during the suspension
- Not all insurers offer this option—check your policy before purchase
🛠 Tip: Compare policies before you buy. Look for flexibility such as hardship suspension and clear terms around reactivation.
3. What If You Lose Your Cover?
If you’re unable to afford your premiums and don’t have redundancy insurance or a suspension option, you may have to let your policy lapse.
While this is not ideal, it’s not the end of the world.
Here’s what happens:
- You’ll be covered by Medicare, Australia’s public healthcare system
- You can remain without private hospital cover for up to 1,094 days without incurring Lifetime Health Cover loading
- Once you find a new job, you can resume private coverage—though waiting periods may apply if your lapse exceeds allowed thresholds
4. What Private Health Covers (That Medicare Doesn’t)
While Medicare provides a safety net, it doesn’t offer the same range of benefits as private insurance. Here’s what you may lose access to:
| Covered by Medicare | Not Covered by Medicare |
| GP & specialist visits | Ambulance services |
| Public hospital treatment | Private hospital stays |
| Eye tests | Glasses & contact lenses |
| Some dental surgeries | Regular dental check-ups |
| Partial prescriptions | Physiotherapy, Chiro, etc. |
| Diagnostic tests | Hearing aids, private nurses |
Private cover also allows you to:
- Choose your own doctor or surgeon
- Access elective procedures sooner
- Enjoy private hospital accommodation
5. Lifetime Health Cover (LHC): Avoid Future Penalties
LHC is an initiative that encourages Australians to take out hospital cover before age 31.
If you let your cover lapse for more than 1,094 days, you may face loading penalties (up to 70% increase in premiums) when you rejoin later in life. Keeping some form of coverage—or reinstating it as soon as you’re able—is key to avoiding future costs.
Final Thoughts: Planning for the Unexpected
Even if your job feels secure today, things can change quickly. Company restructures, budget cuts, or market downturns can happen without warning.
That’s why we recommend:
- Reviewing your current private health insurance: Does it allow for premium suspension?
- Considering redundancy insurance if you’re the main earner
- Comparing flexible policies that can adapt to life’s curveballs
How Hippo Insurance Can Help
At Hippo Insurance, we’re here to help you make smart decisions—before life forces your hand. Whether you’re:
✅ Comparing income protection or redundancy insurance✅ Re-evaluating your private health policy✅ Looking for a cost-effective way to stay covered while between jobs
We’ve got your back. Speak to a licensed adviser and stay ahead of life’s uncertainties.
This article contains general information only. Please seek tailored financial advice for your personal situation.
Want to know more?
If you’d like to discuss any of the content in this article and how it may apply to you, please call me on 1800 668 153.
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Author Profile: Jeffrey Liu, JP, is the founder and principal adviser of Hippo Insurance (aka: Hippo Wealth), with a deep expertise in wealth protection. His extensive experience includes roles in the wealth management divisions of Westpac, ANZ, and a local multi-family office. As the host of “Riches Talk,” a podcast dedicated to cultivating personal and business growth, Jeffrey has established himself as a thought leader in developing life riches. His insights have been featured on SBS, The Australian, and Channel 7. Notably, he was a semi-finalist on Australia’s Got Talent in 2010. Learn more at http://www.hippoinsurance.com.au
