Income Protection for tradesmen


Looking for affordable but quality cover to protect your income as a tradie? Compare your options from Australian brands.

If you're a tradesman, then it's crucial to consider income protection for various reasons. For instance:

  • Working as a tradesman is often a hazardous occupation. From occupation-specific risks, for example electric shock for electricians, through to the more general risks associated with working on building and construction sites,
  • Many tradespeople are self-employed or run a business. If you’re struck down by illness or injury and unable to man the tools, you won’t be able to draw an income and you and your business could quickly head towards financial difficulty. Furthermore, you won't be entitled to sick leave if you don't have an employer.

Rate of injury claims fort tradesmen

This is borne out in the statistics, with figures from Safe Work Australia revealing that trades workers and technicians in Australia had a serious claims incidence rate of 15.4 per 1,000 employees in 2012-13.

Source: Australian Workers’ Compensation Statistics, 2012–13, Safe Work Australia.

Compare Income Protection with these direct brands

Name Product Short Description Maximum Monthly Benefit Maximum % of Income Covered Maximum Benefit Period Waiting Period
Cover up to 85% of your Income (up to $10,000 per month) if you can’t work due to sickness or injury. Cover for 1,000 job types - full-time, part-time and self-employed.

5 years
14, 28, 60, or 90 days
Receive up to 30% off in your premiums if you’re in good health and meet BMI qualification tests. T’s and C’s apply.
24 months
14 or 28 days
Take out a policy and get a $100 bonus gift after holding cover for 2 months. T's and C's apply. Offer ends 31 March 2019.
5 years
14, 28, 60 or 90 days
Cover up to 75% (to a maximum of $10,000) of your monthly income with Guardian Income Protection.
5 years
30 or 90 days
Cover up to 75% (to a maximum of $30,000) of your monthly income with NobleOak Income Protection. Plus, get your first month free. T&C's apply.
2 years or to the age of 65
30 or 90 days
Fast online application - no phone call needed. Cover up to 85% (to a maximum of $42,000) of your monthly income with Aspect Income Protection.
5 years
14, 30, 60 or 90 days

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Will I pay more for Income Protection as a tradie?

Depending on the nature of your trade, an insurance underwriter may consider applying an extra loading if they deem that you present an extra level of risk. This is because the trade requires workers to be quite active and dependent on the wellbeing of their bodies. Where an office worker may be able to continue to work in some capacity following an injury, this may not necessarily be the case for some trades workers.

Being tradesmen is only one factor that insurers consider. Other factors include:

Factors that influence your premium include:

  • Gender. Women will generally pay more for income protection as they are more prone to take time off work as a result of injuries and illness.
  • Age. The older you are the more you will pay for income protection as you're considered more at risk of injuries and illness.
  • The specific trade type you work as. This will vary with each policy holder but in general, higher risks trades will attract higher premium.
  • If you're a smoker. Smokers will be subject to a higher premium.
  • Your income levels. The higher your regular income is the more it will cost to insure it.

Are there tax benefits when it comes to Income Protection?

Will I be charged GST on my Income Protection plan?

There is no GST payable for Income Protection.

Are my income protection premiums tax-deductible?

In most instances, policyholders can claim the cost of income protection premiums at tax time. This is because those premium payments are deemed to be seen in the same way as their regular income.

Should I still consider Income Protection if I have WorkCover?

While workers compensation insurance may provide some cover to workers for injuries that are sustained at work, it will not provide cover for illness or accidents that have occurred offsite. If you were to break your ankle playing soccer on the weekend with friends and be forced to take time off work as a result, you would not be eligible to receive any payment from WorkCover.

Income Protection and workers compensation compared

income Protection Workers Compensation
Provides an ongoing benefit for both sickness and accident that has occurred at work or outside of the workplace. Pays a lump sum for injuries sustained at work or while travelling to work.
Income protection benefits will pay up to 75% of your income. Some will allow for the policyholder to receive more but this must be contributed to their superannuation fund. Workers compensation benefit varies from state to state.
Benefit payments may only continue until age of 65. Depending on the state the worker is in, benefit payment generally only last from 13 weeks to 9 years.
There is no cap on benefit payments for Income Protection. They may continue until the end of the policyholders benefit period. Benefit payments are usually capped at a maximum limit for the lump sum benefit payment.

While workers compensation will provide some much needed support for accidents that have occurred at work, this type of cover does simply not offer the same comprehensive, tailored protection that is found with income cover. The reality is that we are often at just as much risk of experiencing accidental injury and illness outside of the workplace, especially if you enjoy partaking in sport and other pastimes where there is some risk of injury occurring.

Tradesmen: Follow these steps when applying for income protection

There is a quick 4 step process to assist Tradesmen looking to take out income protection cover.

  1. Find out what benefits you already stand to receive from your employer. If you are not a self-employed tradesman, you may already be eligible to receive a number of benefits from your employer in the event of an accident. This may impact your decision on what benefits and options you wish to include on your policy.
  2. Gain an understanding of the different benefit options available. There may be different policy options and benefits available that are more suitable for your situation as a tradesman. Similarly, you may wish to consider policy options that provide additional support for your family in the event that you are forced to take time out of work.
  3. Make an inquiry with an insurance consultant. An insurance consultant can let you know what insurance companies are more likely to offer affordable cover to tradies. Their knowledge of the market means they are able to locate affordable policy options that offer the right level of protection for your situation.
  4. Review policy options. Review the different policy options that are available. Consider the price and the conditions and exclusions for a benefit being received. Ensure you read through the product disclosure statement closely.

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Picture: Shutterstock

William Eve

Will is a personal finance writer for specialising in content on insurance. While he cannot give personal advice to clients, Will enjoys explaining the intricacies of different types of protective cover to help individuals and businesses find affordable cover that won't leave them underinsured.

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