We deal with hundreds of tradies every month who are considering taking out insurance.
What we find is that most decide to go with public liability cover only, with a smaller percentage choosing to take out income protection.
So why should you bother within income protection, and is it really worth it for a tradie?
To determine this we’ll go through some of the common concerns that tradespeople have with the insurance.
Is it worth the cost?
There’s no question that income protection can be more expensive than some other forms of trade insurance, such as public liability or tool insurance.
But you need to keep in mind that the benefits available can be considerably higher, and there is certainly a lot more at stake.
I’m going to use an old insurance cliche here, but it is still as relevant as ever.
Ask yourself this – what is your most valuable asset?
No it’s not your house or your ute, it’s your ability to continue earning a living.
And that is what income protection is essentially insuring.
If you find yourself unable to earn a living due to an injury or illness, your income protection will pay you an ongoing benefit.
This ongoing benefit will continue until you are able to return to work, or until your benefit period expires, whichever comes sooner.
With benefit periods available up to age 65, you can protect your income all the way through to retirement age when you’ll be able to switch to your superannuation or the aged pension.
Think about this…
If you’re a 30 year old plumber earning $90,000 a year and you suffer a serious injury or illness that leaves you unable to work ever again, how much cash is at stake?
Assuming a retirement age of 65, your total lost earnings could be a massive $2.7 million!
The true figure would actually be a lot higher, as this figure does not take into account inflation. If we used an inflation rate of 3% the total would be an incredible $5.4 million.
Of course this example of never being able to work again is pretty extreme, and most income protection claims run over a far shorter period of time.
But even if you were unable to work for just a couple of months, we are still potentially talking tens of thousands of dollars in lost earnings.
I’ll probably never need to claim anyway
It’s true that many tradies can go for years or even decades without having to take any serious time off work due to an injury or illness.
But you might be surprised by how many tradesmen we have assisted with claims on their income protection policies.
Most of the claims we’ve been involved in have been quite short term, involving perhaps a few weeks or months off the tools.
The most common would probably be nail gun related claims. Whilst none of these injuries have been career-threatening for the tradies involved, they still result in lost income.
Ordinarily an income protection policy wouldn’t be hugely effective for these relatively minor injuries and short term abbesses from work
However, because we strongly recommend options such as ‘day 1 accident’ and ‘specified injury benefit’ we have been able to help plenty of tradies make a successful claim.
In many cases, that one claim will be enough to cover their premiums for multiple years.
Isn’t it difficult to claim?
Some of the ads on television from law firms advertising their services may lead you to believe that claiming on insurance is difficult, but we certainly disagree.
The vast majority of our income protection claims have been successful, and most have them have gone through relatively smoothly.
We believe a lot of this is due to our experience in dealing with tradespeople and workers in the building and construction industry.
We know which policies are most suitable for tradies, we know which options are most important to you, and we know how to handle a claim for a tradie.
Perhaps it is difficult to claim if you take out a generic income protection policy like the ones advertised on daytime television, but it’s not the case with Trade Risk.
So is it worth it then?
Of course it is!
My opinion is a little biased naturally, but being here at the coalface when it comes to tradies and income protection insurance, I think I’m qualified to give my opinion.
I can’t guarantee that every single income protection policy will be worthwhile for every single worker.
However, I do believe that the right income protection policy taken out via Trade Risk will be worthwhile for a tradesperson, if for nothing more than simple peace of mind.
