Accidents and illnesses can occur at any time – but for skilled tradespeople, who frequently work in dangerous environments, they’re more likely to occur than for other professionals. Whether it’s working with power tools and machinery or at great heights, or around large, fast-moving vehicles or handling hazardous materials, the risk of injury and/or illness is ever-present.
With this in mind, it’s important for tradies to consider how they’d be able to afford their monthly outgoings, and, where applicable, support their family, in the event they became seriously injured or ill – and unable to work. In this post, we look at how to select the best income protection for tradies in Australia and what to keep in mind when choosing an insurance policy.
What is income protection insurance for tradies?
Income protection insurance for tradies is a type of insurance policy specifically designed for professional tradesmen, such as builders, carpenters, mechanics, and other jobs generally described as “blue collar”. Income protection cover for tradies ensures you still receive a monthly income in the event you’re unable to work due to contracting a serious illness or suffering an injury.
Your policy should generally safeguard your monthly income until you’re able to resume work or reach retirement age (the specifics of which will depend on the conditions outlined by your specific income protection policy). However, if you are in a high risk trade; your benefit period may be limited to 2 or 5 years.
Why is income protection insurance important for tradies?
Here are a few reasons why it’s crucial for skilled manual workers to get the best income protection for tradies:
- You need to be physically healthy to do your job: the majority of work undertaken by tradies requires a degree of physical strength. Not to mention that it’s generally mentally taxing, requires skill and precision, and to be present and clear-headed – all of which is all the more difficult if you’re ill or injured. Consequently, being sick or hurt for extended periods will lead to a loss of income, making it harder to pay your bills and support your family.
Plus, when you consider that many occupations held by tradies are among the most dangerous in Australia, income protection cover becomes all the more essential.
- Workers compensation is limited: although your employee is legally obliged to give you worker’s compensation, which provides an income if you’re injured or fall ill in the course of your work, it has limited scope. Most notably, it generally lasts a few years at most and has specific criteria on what it will pay out for.
Income protection cover, in contrast, protects you against injuries and illnesses that occur outside and inside of work. More importantly, the best income protection for most qualified trades could cover you till you can return to work or 65 years of age.
- Protection for self-employed tradespeople: Self-employed trade professionals, in particular, need the best income protection for tradies because they don’t receive the same benefits – and, hence, the same protection – as tradies who work for a company.
- It’s often mandatory: you may find that some employers have made it compulsory to have income protection cover before you work on their site. Especially, as alluded to above, if you’re self-employed.
Which professions are covered by income protection for tradies?
Here are some of the most common occupations covered by the best income protection insurance for tradies:
- Labourers and builders
- Gardeners and landscapers
- Heavy equipment operators
This list is by no means exhaustive, so if you don’t see your profession on the list, schedule a free appointment to speak to the team at K Partners – as we’ll be able to advise you on the best income protection cover for your occupation.
How much does income protection for tradies cost?
The cost of income protection insurance for tradies depends on the person taking out the policy. Things that factor into the cost of income protection premiums include:
- Profession: generally, the more dangerous your job, the higher the cost of insurance
- Lifestyle factors: namely, whether you smoke
Additionally, the price of income protection cover is influenced by the:
- Amount of cover, i.e., the proportion of income you want to protect
- Length of benefit period, i.e., how long you’ll receive payments for
- Waiting period, i.e., how long until you start receiving payments
See more: Life insurance cost
Are tradies insurance and income protection for tradies the same?
There is actually a difference between income protection insurance for tradies and tradies insurance in Australia. While you take out the best income protection for tradies possible to safeguard your monthly salary in the event you can work, tradies insurance is designed to protect you from the financial costs of litigation.
Insurance for tradies combines public liability insurance, which protects you in the event someone is injured or their property is damaged during the course of your work; and product liability insurance, which protects you if a product or material used on a job causes injury or damage. In both cases, your insurance provider will cover all your legal costs, damages, and compensation.
Subsequently, insurance for tradies and income protection insurance for tradies actually complement each other, and it’s prudent to take out both policies.
See more: Income protection for sole traders
What other types of insurance might tradies need?
As well as income protection cover, skilled tradesmen should take out:
- Tradies insurance: i.e., public and product liability insurance policies, as described above.
- Life insurance: a life insurance policy will pay a beneficiary, like your family, a lump sum payment in the event of your passing.
- Trauma insurance: this type of cover pays out a lump sum if you suffer a serious injury or become seriously ill.
- TPD (total and permanent disability) insurance: similar to trauma insurance – but only pays out a lump sum if you suffer an injury or illness serious enough that you can never return to work.
Where to find the best income protection insurance for tradies
With decades of combined accounting and financial planning experience, K Partners’ skilled team will help you find the income protection cover that best suits your exact needs.
For impartial advice on income protection insurance, life insurance, or any other aspect of estate and financial planning, contact us to book your consultation.
Please note that all the while the information provided above is factual in nature, it’s also intended to apply generally, and to a broad audience. Subsequently, the information hasn’t taken your personal circumstances or goals into consideration.