For most subcontractors and self-employed tradies the importance of income protection can’t be overlooked. Not only do many worksites and building companies require contracted workers to have income protection, but also being self-employed means you can’t rely on your employer if you find yourself unable to work due to injury or illness. So, let us divulge some need-to-know tidbits and shed some light on income protection insurance.
What’s the quickest way to get income protection as a contractor?
There are two ways to get income protection insurance, advised or direct. Advised income protection is where you entrust a financial adviser to assess your current circumstances and find the right cover for you. If you’re unsure of what policy may be right for you, going through a financial advisor might be your best option. However, it is often quicker to obtain your income protection insurance directly from an insurer, which may suit you if you are a contractor who wants to avoid lengthy delays, and get working as soon as possible.
Direct income protection leaves it to you to decide on a provider. Luckily, with the internet literally at our finger tips it has never been easier to conduct your own research and compare income protection insurers. Going direct is seen by many as an efficient way to get covered and get covered fast.
It is also worth noting that, according to the ATO, income protection premiums may be tax deductible in many cases. If you would like further information on the tax implications of income protection insurance, you should contact a professional financial adviser.
Want to get on the jobsite quickly? Start comparing providers below.
The table below is generated based on a male aged between 20-29 years old, a non-smoker who works in Trades and Services. The results below are sorted by star ratings from highest to lowest and with links to providers’ websites.
How does income protection insurance work?
If you’ve done your research and landed on the right cover for you, your income protection insurance should act as an ample back-up if you’re unable to work due to injury or illness. To get the process rolling, start by putting in a claim. If the insurer has approved your claim and once your waiting period has ended your monthly benefits should begin. Generally, this benefit will continue until you are able to return to work or until the agreed benefit period ends.
How much should you expect to receive?
Not all policies and insurers are created equal, so we always recommend you shop around to find a policy that works for you, and that you read the Product Disclosure Statement carefully for any policy you are considering. However, as a rule of thumb, for income protection most insurers will typically offer to cover up to 75% of your pre-tax income. Estimate how much cover you may receive using our income protection insurance calculator.
Why workers’ compensation may not be enough for contractors
If you are lucky enough to receive workers’ compensation, you will be covered for most injuries or illnesses sustained at work. However, if something were to happen to you off the jobsite that leaves you unable to work, workers’ compensation would generally not be applicable. That’s where income protection insurance would come into play. Unlike workers’ compensation, income protection covers you 24 hours a day and seven days a week. Start comparing insurers today!