Income protection for tradies
Income protection for tradies: financial protection that works when you can’t.
Key takeaways
- Income protection replaces up to 70% of your income, and up to 75% with some insurers, if injury or illness stops you working, covering you anywhere.
- A 35-year-old male carpenter sample monthly premium is often $323-$916.
- Premiums are typically tax deductible and policies cover contractors or self-employed individuals.
How does income protection work for tradies?
If you're a tradie, you're well aware of the dangers of your work. Income protection insurance for tradies is designed to replace up to 70% of your income, and up to 75% with some insurers, if you're unable to work because you get injured or become ill. Unlike workers' compensation, it covers you if you get injured inside or outside of work, whether you are a full-time employee, contractor or classed as self-employed.
Once you've had your claim accepted, income protection pays you a monthly benefit either until you're fit and able to return to work, your benefit period ends (you can choose when this is), or you turn a certain age (usually around 65 to 70 years old), depending on the policy you opt for.
Summary of professions covered by income protection
The list below outlines some of the main trade professions that income protection can cover.
- Carpenter
- Electrician
- Heavy equipment operator
- Labourer
- Landscaper
- Painter
- Plumber
- Mechanic
- Machinist
- Locksmith
- Ironworker
How much can tradies expect to pay for income protection?
This depends on your profession, as well as factors such as your age, gender and smoking status. Generally, you can expect to pay more than white collar jobs, because there's more risk involved.
To give you an idea of how much a tradie can expect to pay, we've put together a table on the different costs for both male and female carpenters.
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How we picked these
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How we picked these
Keep in mind that this will differ depending on the riskiness of your job. High risk manual workers are likely to pay more.
Why might tradies need income protection?
Income protection is important for anyone that relies on their income to pay the bills, which is just about all of us. It's arguably doubly important for tradies. Here's why:
- Your job requires you to be physically healthy. If an office worker breaks their leg playing footy on a Saturday, they probably won't need to take much, if any, time off work. Tradies can't get off that easily. Any injury is likely to prevent you from working, and if you go back too early, you risk making your injury worse. Income protection lets you take the time off that you need.
- It protects you everywhere. Unlike workers' compensation, income protection covers you inside and outside of work. You may do most of your heavy lifting at work, but accidents can happen anywhere. Income protection can look after you wherever you are, even overseas, for injuries and illnesses.
- It's sometimes compulsory. Many building sites require you to have income protection insurance as well as workers compensation.
- Workers' compensation may not be enough. Workers' compensation often only pays you for a limited number of years and in lots of cases won't be enough to cover all your bills. Income protection, on the other hand, can pay you up to 70% (and in some cases more) of your current salary, so you know exactly how much you're getting.
- You work in a risky profession. It may feel safe because you're familiar with it, but trade jobs are among the most dangerous in Australia. It's smart to protect your income and the people who rely on it.
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What different scores mean
9+
Excellent
These products offer great value, with a good score across both features and price.
7+
Great
These are competitive products, though they didn't quite get top scores.
5+
Standard
These products might offer less value or command a higher premium than others in the market.
0+
Basic
These products might only offer a basic set of features or aren't very competitive on price.
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How we picked these
Finder Score - Income Protection
Income Protection is a little complicated and a lot overwhelming. That's why we made the Finder Score, to make it easier to compare Life Insurance products against each other. Our experts analysed over 21 products and gave each one a score rank out of 10, to make it easier to compare Income Protection products against each other.
But a higher score doesn't always mean a product is better for you. Your situation is unique, so your policy choice will be too. Don't think of Finder Score as the final word, but as a good place to start your life insurance comparison.
What other options are there for tradies?
Income protection is definitely one of the most important insurance types worth having, but there are a few others worth knowing about.
- Personal accident. Personal accident is like income protection except it doesn't cover you for illnesses, just accidents. It's a cheaper alternative to income protection because it doesn't cover you for as much.
- Public liability insurance. This protects you if you cause personal injury to someone or damage their property. For example, if you were fixing a plumbing issue and in the process accidentally injured someone, this could cover you for legal costs and more.
- Product liability insurance. A little like public liability, but this one protects you if a product or job you worked on causes injury to someone or damages their property. For example, if there's an issue with the materials you used on a job that causes damage, this can cover you.
- Other types of life insurance. Death cover can pay your family a large lump sum if you die, while TPD can cover you if you become permanently disabled and have to quit work for good.
Bottom line
You can risk putting it off, but if you're a tradie, there's a lot more chance of you needing income protection. For a few bucks a week, income protection can provide peace of mind and financial security.
Frequently asked questions
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