What Happens to Your Private Health Insurance After You Lose Your Job?

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.