There are many inherent risks associated with doing business, being a tradesman and also being a self employed tradesman can significantly increase that risk. Questions arise surrounding your job security. What if I am injured on the job? How will I support my family? How will I meet my financial obligations? These are just a few of the concerns of tradesmen who work in an uncertain environment daily.
Consider an example of an owner operated one man gardening business, with many services offered including lawn cutting, hedging as well as landscaping. Now imagine if the owner of this company broke his leg on the job after falling off a ladder. The doctors said it was pretty bad and he would be unable to work for a few months. The gardening business owner unfortunately did not have an income protection policy and has suffered not only the physical pain from his injury, but financial hardship and the loss of business. Many of his loyal customers have sought other gardeners to fulfill their gardening needs and the gardening business owner has to be relying on his wife to support him and his three kids. Obviously this is a less than ideal scenario.
Income protection is a form of trade insurance that can protect up to 75% of your gross income should you become unable to work due to an injury or illness. Income protection insurance unlike other insurance policies will provide a monthly disbursement if you are unable to work due to an illness or injury suffered. Income protection is important for all workers, but it is particularly essential to tradesmen. Feedback from the Australian insurance industry for tradesmen indicated that tradesmen have the greatest number of loss of income claims when compared to other occupations who often suffer a loss of income due to injury. One could conclude that tradesmen are at a higher risk of losing their income.
Income protection is widely available from companies that offer insurance specifically to tradesmen. Most standard traders will have no trouble receiving coverage from income protection. The premium does however increase based on the type of trade, age and your smoking status. Your premium generally increases as you get older. Higher risk trades are also faced with greater premiums.
There are several options available under income protection policies. The option chosen at application will affect your ability to receive claim payments if an illness or injury arises.
Benefit Period
The benefit period refers to the maximum length of time you will continue to receive benefits once you have claimed for each event.
Waiting Period
The waiting period describes the length of time from the date of your illness or injury that you are unable to work before you will begin to receive benefits from your claim. For a tradesman the typical length of time is 30 days before you are eligible to receive benefits.
Regardless of the cost of premiums, insurance payment for loss of income is a small price to pay for the potential loss of income and business that a tradesman can face if he is injured or ill. Self-employed persons are generally not eligible for workers compensation so the need for income protection is much greater. Alleviate these fears by researching possible income protection policies offered by different companies. Income protection policies offer tradesmen benefits if they are unable to conduct their usual business activities. Protect yourself today.
