Income Protection Insurance

Income Protection or Accident and Sickness Insurance?

Insurance for accident or sickness - injury and illness

Accident and Illness Insurance or Injury and Illness Insurance or Accident and Sickness Insurance? So many different names for the same thing; it's enough to make a Tradie want to forget organising their insurance and get back on the tools. But when your whole financial structure is normally dependant on your ability to earn an income it is important that you read the information below and understand the benefits of protecting your income with the right insurance cover to suit your needs. 

 

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What is Income Protection Insurance?

24/7 cover for you

Sickness and Accident Insurance (or Income Protection Insurance - you get the idea) covers tradesmen 24/7 whether you are at work, at home or kicking the footy in the park with the kids.

 

Up to 5 years financial benefits

Tradesure Injury & Illness Insurance provides up to 5 years of financial benefits if you have an accident and up to 2 years financial benefits if you get sick and can’t go to work.

 

Covers you at work and home

Unlike WorkCover, Income Protection Insurance covers more than just work related incidents. Many Tradies think that Sickness and Accident Insurance will only covers them while they are at work. However, Income Protection is a 24/7 insurance policy which covers tradesmen if they fall off a ladder at home, hurt themselves kicking the footy with their kids or are stricken by serious illness.

 

A regular income while you recover

For tradesmen, Income Protection Insurance provides continued regular income while they take time off to recover. In some cases, it allows them to employ people in their business as they may not be able to rely on business profits for income.

 

Can you survive 6 months without any income?

At Tradesure we often ask tradesmen how they would cope if they were off work for six months. Would they have enough savings to cover the cost of the rent, mortgage or car payments or their most basic living expenses?

 

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Income Protection Insurance Australia

You insure your car  . . . What about your body?

Injury & Illness insurance can be the most important insurance cover a tradesman can have. Tradesmen readily have commercial vehicle insurance and tools insurance but they’ll often overlook covering themselves against sickness and accident which can prevent them from earning an income for significant periods of time.

 

But it will never happen to you . . . right?

Many Tradies have never really thought about it, and they soon realise that they can’t afford to have an “it’ll never happen to me attitude”.

 

As you get older the risks increase

Sickness and ill-health increases with age and experience has shown that many self-employed tradesmen particularly over the age of 45 years will be out of work for around three months or longer, at some time during their working life.

 

It may be a requirement

While it is not a universal requirement, some tradesmen are not allowed to enter a work site without Personal Income Insurance, while others may not be paid by the contractor if they don’t have a current Income Protection Policy in place to comply with the terms of their contract.

 

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Sickness and Accident Insurance

Approvals are needed

Applying for and being accepted by the insurance company for Sickness and Accident Insurance requires the completion of a brief health statement. Approval time is usually 24 hours, however on occasions we have achieved urgent Accident and Sickness Insurance approval within a couple of hours.

 

7 out of every 10 claims are for sickness

Income Protection Insurance comprises two basic policies: Accident Only or Sickness and Accident; and at Tradesure, we strongly recommend the latter. Statistics consistently indicate that approximately 7 of every 10 Sickness and Accident Insurance claims are the result of sickness. 

 

It really is affordable

An Income Protection Policy specifically for tradesmen and subcontractors, start from a low $40 per month and the premium may be paid monthly at no additional cost.

 

Give us a call

To get the best Income Protection Insurance for you, simply give us a call and talk to a Tradie expert on 1800 024 799. Easier still, you can fill in a form for Income Protection Insurance Quotes

 

Income Protection Insurance Quote


Income Protection Insurance FAQs

  • What is Income Protection / Injury and Illness  insurance?
    • Income protection Insurance covers you for your loss of income due to an accident and/or sickness 24/7.

  • Why is Income Protection Insurance important?
    • Your whole financial structure is normally dependant on your ability to earn an income. If your income stopped consider how you would be able to meet your financial commitments such as home repayments, rent, vehicle and other financial loan commitments, everyday living expenses etc. Income Protection is practically the only way of replacing your income when you become sick or injured and unlike Workers Compensation it covers you 24 hours a day 7 days a week so regardless when the accident or sickness occurs your income can be protected.

  • Are there different types of Income Protection Insurance?
    • Yes there are differences. The standard Injury and Illness policies issued by many of Australia’s leading insurers offers usually a 2 year benefit period on claims and is subject to the insurer offering renewal. If you have had a claim or series of claims then the insurer has the option to not offer renewal.

      This is the most common cover taken out by tradies and is generally the most cost effective. Another type of Income Protection available is called Guarantee Renewable or Non-Cancellable Income Protection.

      This is the best Income Protection product available as it offers a guarantee of long term protection and providing you pay the premium you are insured up to either 60 or 65 as it cannot be cancelled by the insurer. Generally this insurance is offered by the Life Insurance companies and is normally more expensive.

      Tradesure offer the standard cover, however, if a client particularly requires a non-cancellable policy we have associates throughout Australia who can assist with this.

  • Who is eligible for Income Protection
    • Anyone who earns a living through personal exertion is eligible although the vast majority of people who take out this insurance are self –employed people (see notes further on about cover for employees). Some insurers have age acceptance limits – for instance from 18 years of age until 60 years of age depending on the occupation.

  • How much can I insure for?
    • This can also vary from insurer to insurer. Some insurers will only allow you to insurer for up to 70% of your annual gross income while others will permit up to 100%.

  • What if I have a pre-existing condition or conditions – will they be covered.?
    • Normally insurers will exclude cover for pre-existing conditions. If the condition occurred say over 5 years ago and they have been no issues with the condition since, your insurer may cover you for this, however, this is normally subject to a doctor’s report and acceptance by the insurer.

  • Is there an excess or waiting period on claims?
    • Most insurers have a standard waiting period of 7, 14 or 28 days and the premium will reduce if the waiting period is longer. For most tradies we recommend a 14 day waiting period as this saves some premium and we have found that most tradies can survive on savings for a two week period. If a tradie has substantial savings or funds at their disposable we would also recommend that they consider a longer waiting period on claims to reduce their premium further while at the same time they would be covered for any of the longer term claims which are the claims that can impact the most.

  • What about ongoing business expenses?
    • Most insurers have this additional cover available. Please note it does not cover every business expense and only those business expenses listed in the policy document which once again can vary from insurer to insurer. Please note this additional benefit is usually only payable for one year and a waiting period usually applies.

  • What if I am an employee – can I insurer my income?
    • Well the answer is yes you can.

      A cover for this would normally exclude any Workers Compensation payments so we recommend a cover which takes this into consideration called Injury & Illness Outside Working Hours cover. What many employees fail to understand is that Workers Compensation excludes any loss of income due to sickness that is not work related. This means there is a real risk for employees who lose their income through sickness as generally sick pay is also limited. This cover also includes cover for loss of income due to an accident outside working hours so if you were injured playing with the kids, fell off the ladder at home or sustained an injury in some way, this policy can cover you. It is also tax deductible for employees but keep in mind the benefits are tax assessable.

  • Can I be covered for sports or hazardous pursuits and what other exclusions should I be aware of?
    • Generally these are excluded by most insurers and it is something you definitely need to advise them of if you are involved in these activities. Standard exclusions for insurers can include cover for professional sports, aviation other than in a standard passenger plane, pregnancy, self-inflicted injury, motor or motor sport racing, Motor Cycle riding, injury if under the influence of alcohol or drugs, war, invasion, and terrorism. Once again we highly recommend you are aware of the exclusions of any Income Protection policy. Some insurers will cover you for amateur sports including football subject to an additional premium.

  • What information do I require to make a claim?
    • Normally insurers require a claim form from the insured person. Part of this can also include a doctor’s report or certificate to verify what has occurred and an indication of the time off work. The insurer can also request “proof of earnings” to substantiate the claim. This usually consists of a letter from your accountants, or a copy of your last tax return. This is one reason to keep you tax up to date to avoid claim complications because of insufficient or outdated records.

  • How often can I expect to be paid when I claim?
    • This often depends on the severity of the claim. Say if you were off work for 4 weeks and had a 14 day excess then the insurer would normally pay you at the end of the 4 weeks. If you are off work for longer than a month, claim payments can vary from insurers to insurer – some pay every fortnight while others have a standard payment of every month usually in arrears. If you require funds urgently, particularly in the event of a claim longer than 1 month, insurers can be approached to arrange payments more regularly but remember it is at the insurers discretion. We have seen insurers make claim payments in advance where the client’s circumstances are fairly desperate and once again this is a matter of negotiating this with your insurer.

  • Is my premium tax deductible?
    • Income Protection premiums are tax deductible for both self-employed persons and employees. Please also keep in mind that the benefits are tax assessable.

  • Am I covered Outside Australia?
    • Once again we recommend you check your Product Discloser Statement as this can vary from insurer to insurer. Some insurers restrict the cover to Australia while others offer worldwide protection. Remember as this covers you 24/7 and includes cover for injury and sickness when you are not working as well so it is worth checking where you are insured particularly if you are travelling overseas.

  • Do I really need Injury & Illness Insurance?
    • While it is not a universal requirement, some tradesmen are not allowed to enter a work site without Injury & Illness insurance (formerly income protection insurance) while others may not be paid if they don’t have a current Injury & Illness Insurance policy in place that complies with the terms of their job contract.

  • How long does it take to get Injury & Illness Insurance approval?
    • Many tradies think that Injury & Illness Insurance(formerly Income Protection Insurance) only covers them while they are at work. However, Injury & Illness insurance is a 24/7 insurance policy which covers tradesmen if they fall off a ladder at home or hurt themselves kicking the footy with their kids.

      Get an Injury and Illness Insurance Quote online now!