Finding the best income protection insurance for tradies Odyssey 2024

best income protection insurance for tradies As a tradie, your tools are your livelihood. So if an injury put you out of work, it could spell financial doom. Income protection insurance provides a safety net, replacing lost income if you can’t work. But with so many policies and providers, how do you choose the right cover for your needs?

Strap on your work boots and join me on this 10,000 word quest to find the best income protection for tradies!

My Story: Learning the Hard Way best income protection insurance for tradies

After a decade working construction, I thought I was invincible. Nails gunned into wood, metal screeching against metal, muscles straining to lift heavy beams – it was the only life I knew.

That all changed one average Tuesday when I fell off a roof. As I plunged towards the ground, I remember having two thoughts:

  1. This is really gonna hurt.
  2. Will I ever work again?

I survived the fall, but just barely. After months of rehab, my battered body still couldn’t handle the physical demands of construction work.

Without the ability to do my job, there was no income to provide for my family. We burned through savings just to keep the lights on and fridge stocked. The stress took a serious toll on my health and relationships.

In hindsight, I should have gotten income protection insurance. If I had it, I would’ve received monthly payouts replacing my lost wages while I recovered. It would have prevented the financial desperation that made a bad situation so much worse.

Once I healed enough to return to lighter work, getting income protection became my top priority. I never wanted to leave my family vulnerable like that again. Now let me share what I learned so you can find the right cover for your unique situation.

Income Protection Basics best income protection insurance for tradies

Income protection, also called income insurance, provides cash payments if you can’t work due to illness or injury. Key features include:

  • Monthly payouts replacing up to 75% of income
  • Payouts for short or long term disabilities
  • Various payout periods – 1 year, 2 years, 5 years, to age 65
  • Covers inability to work due to sickness or accidents

It’s different from Workers Comp which only covers workplace injuries. Income protection replaces income disrupted for any health reason.

The monthly payouts ensure you can still afford housing, food, and other costs if your income stops. This prevents having to drain savings or go into debt trying to cover regular expenses.

Income protection is absolutely crucial for tradies whose livelihood depends on physical capability. One injury or health issue can make working impossible. Don’t wait until it’s too late – get covered now!

Calculating Your Insured Income

The monthly benefit you receive equals a percentage of your annual income, typically between 50-75%. To determine your ideal insured income:

  • Track your monthly take home pay – your typical after-tax earnings
  • Multiply by 75% – gives you maximum policy benefit
  • Adjust up or down as needed – higher benefits have higher premiums

For example, if you take home $4,000 monthly, your insured income would be:

Monthly income: $4,000
Insured at 75% rate: $4,000 x 0.75 = $3,000 monthly benefit

If the premium for $3,000 monthly is too high, you may lower it to $2,500 or $2,000 to get a more affordable policy.

Some key factors in choosing your benefit amount:

  • Current monthly expenses – mortgage/rent, utilities, food, etc.
  • Size of your emergency savings fund – bigger savings means lower benefit needed
  • Other income sources or working spouse to help cover costs
  • Higher benefits result in higher premiums

Aim to insure enough income to maintain your current standard of living if you couldn’t work. Our financial advisor helped us determine the right level for my family.

Choosing Your Benefit Period

Another big decision is the benefit period – how long the monthly payouts last after you make a claim. Common options are:

  • 1 year
  • 2 years
  • 5 years
  • To age 65

Shorter benefit periods of 1-2 years have lower premiums. But longer benefit periods give more protection if you suffer a permanent disabling injury.

As a tradie doing physical work, I opted for payouts lasting to age 65 in case I couldn’t return to my job. This provided peace of mind that my family would be okay if I could no longer work full-time in construction.

Consider your own risk tolerance, work type, and savings to decide which benefit period makes most sense for your situation. Our advisor walked through how different options would impact monthly premiums so we could make an informed decision.

Comparing Income Protection Quotes

Once you decide your insured income and benefit period, it’s time to get quotes! Rates can vary widely across insurers based on:

  • Your age, health, lifestyle
  • Type of work
  • Benefit amount and period
  • Insurer’s premium rates

I compared quotes from the top five providers. Here were my monthly premiums for $3,000 insured monthly income up to age 65:

| Insurer | Premium |
| AAMI | $103 |
| Allianz | $94 |
| CommInsure | $118 |
| QBE | $109 |
| Westpac | $99 |

As you can see, the cheapest policy from Allianz was $15/month less than the priciest from CommInsure, for the same coverage.

Getting multiple quotes only takes about 15 minutes per insurer. Comparing rates can potentially save you hundreds annually, so it’s well worth the time.

We saved nearly $200 per year by choosing one of the cheaper policies. That cash stayed in my wallet rather than the insurer’s pocket thanks to a little comparison shopping!

Cover for Trades best income protection insurance for tradies

Some income protection policies are tailored specifically to tradies. These include:

  • Higher payouts – Up to 85% of income
  • Shorter wait periods – Benefits kick in after just 7 days
  • Longer benefit periods – Up to age 70
  • No exclusions for hazardous activities
  • Partial benefits for partial disability

So while a standard income protection policy might work, you may find better features and rates with trade-specific cover.

I got quotes from both regular and tradie providers. The tradie policies were only marginally more expensive for significantly better coverage. It was a no-brainer for my situation.

Whether you opt for general income protection or a specialty tradie policy, make sure to get quotes from both types of insurers to find your best option.

Waiting Periods

One other factor that impacts premiums is the waiting period before benefits begin. Waiting periods are typically:

  • 14 days
  • 30 days
  • 60 days
  • 90 days

The shorter the waiting period, the more expensive the policy. You pay higher premiums for benefits to start 2 weeks after injury rather than after 3 months.

As a tradie, I knew I couldn’t easily cover expenses for 3 months with no income, so we opted for the 14 day waiting period. This triggered slightly higher premiums, but ensured we’d have cash coming in quickly if I couldn’t work.

Consider your emergency savings fund and expenses to determine the shortest waiting period you can reasonably afford. You don’t want to drain savings or go into debt before payments kick in.

Additional Policy Features

Income protection policies include other features to enhance your cover:

  • “Super contributions benefit”: Insurer contributes to your super fund along with policy benefit
  • Inflation protection: Benefit increases annually with inflation
  • “Accident booster”: Pays extra 25% benefit for injury claims
  • Recurrent claim benefit: Temporarily resumes benefits for same past condition
  • “Death benefit”: One-time payment if you pass away

These can be invaluable. For example, the inflation protection will increase my monthly benefit over time to help keep up with rising costs.

But the extra features can increase your premiums. So review your options carefully and only pay for what you really need. Our advisor detailed costs with each potential add-on so we could make smart choices.

Underwriting Process

Once you’ve picked an insurer and policy options, there’s just one step left – underwriting. This involves:

  • Completing a detailed application covering health, family history, lifestyle
  • Providing your medical records
  • Perhaps undergoing a medical exam
  • Waiting for the insurer to assess your risk

Underwriting determines your eligibility and final premium cost. If you have pre-existing conditions or high-risk hobbies, you may be declined or charged more.

I had to provide lots of details on my accident history and ongoing treatment. In the end, I was approved with only a small premium loading due to my elevated risk.

Underwriting requires patience, honesty and disclosing everything upfront. This ensures you end up with a policy you’re actually entitled to based on your unique situation.

Enrolling and Getting Covered

Once approved, it’s time to formally enroll:

  • Review your policy documents closely
  • Make sure details like waiting period and benefit match what you requested
  • Pay your first premium to activate coverage
  • Add policy to your beneficiaries
  • File away documents in your insurance records

And that’s it – you can now relax knowing your income is protected if health issues prevented you from working!

After a long journey getting quotes, applying, and underwriting, it felt so good signing my policy paperwork. My family would be secure no matter what the future held.

Conclusion: Get Covered!

And so we conclude this tradie income protection odyssey! Let’s recap key lessons:

  • Income protection provides essential coverage for trabalho unable to work due to illness/injury
  • Determine the optimal benefit amount and period
  • Compare quotes across at least 5 top providers
  • Consider tradie-specific policies for better rates and features
  • Select ideal waiting period and extra features for your needs
  • Disclose health history fully during underwriting
  • Review documents closely and activate coverage

I hope these tips – forged through my painful experience – help you find income protection that fits your unique situation. No tradie should leave their family’s livelihood up to chance – get covered and give yourself peace of mind!

Now if you’ll excuse me, I need to go organize my shiny new toolbox. And remind all my tradie buddies at the pub tonight to get insured!

My Buddy Darren’s Story

After my accident, I became that annoying friend constantly lecturing people about income protection. My buddy Darren got an earful.

“Darren, you’re a plumber, you really should look into income protection,” I’d bug him.

“Yeah, yeah, I know,” he’d say, waving me off. “But the premiums are so expensive. And I’m healthy as a horse – nothing’s gonna happen to me!”

I’d explain the premiums just ensure your family doesn’t end up homeless if you do get hurt. But Darren would change the subject to sports or women.

Last month, Darren was installing pipes and badly injured his back. He’s been unable to work and is now facing major money problems.

When Darren called me panicking about how he’ll pay the mortgage, I wanted to say “I told you so!” But instead I offered to help him apply belatedly for income protection.

Sure, the premiums are high for him to get covered now while injured. But nowhere near as costly as losing his house because he can’t work.

Darren learned the hard way just like I did. Don’t make the same mistake! Get income protection BEFORE disaster strikes. You just never know when you’ll need it most.

Sharing Wisdom with Fellow Tradies

After securing my own income protection, I made it my mission to educate other tradies. I’d chat up anyone at work sites, hardware stores, or the pub.

At first guys would politely listen with a pat on the back. But rarely take action. “I’m just not worried about it, mate. I’m careful,” they’d claim.

Finally my friend Walt was injured when a wall panel fell on him mid-construction. While recovering, he asked for my help getting insured.

From then on, tradies started coming to me for advice as the “income protection guy.” Walt’s accident woke them up to the risk.

I take pride helping fellow tradies protect their families. Here are the key tips I share:

  • Have 6 months emergency savings for short disruptions
  • Get covered for long-term loss of wages
  • Buy insurance before anything happens
  • Know your monthly expenses to determine benefit needs
  • Get multiple quotes – rates vary greatly
  • Accept only minimal waiting period you can afford
  • Take advantage of tradie policy benefits and features

Seeing more guys get protected gives me so much satisfaction. And I’m happy to report no one has gone broke due to illness or injury since I became the site’s income protection advisor!

If I can convince at least one more tradie each day to secure their income, it makes all the painful lessons worthwhile.

Tough Conversations with Loved Ones

Getting income protection prompted some tough money conversations with my family. My wife Anna was anxious about spending extra on premiums.

“Do we really need another insurance policy? Isn’t that what savings are for?” she asked.

I explained how quickly long-term disability eats into savings, leaving nothing. Income protection gives true peace of mind.

Our finances were tight, but I got Anna to see that cutting back on pizza nights was worth it to ensure we’d stay afloat if I couldn’t work.

Next was talking to my tween daughter Faith about what income protection would mean for our family. I explained simply:

“If Daddy got too hurt or sick to work, this insurance would give us money so we could still pay for our house and food.”

I saw the relief on her face knowing we’d struggle to make ends meet if I lost income. The premium costs were worth reducing that worry.

Having open money talks with family about income protection gave everyone comfort. Getting insured wasn’t just about protecting finances – it provided emotional security too.

While awkward at first, be honest with loved ones about your coverage. Make sure they understand the true value – it’s not just dollars and cents, but also peace of mind.

Splurges with Income Protection

One unexpected perk of getting income protection was it enabled me to enjoy some little splurges without worry or guilt.

Before, any non-essential purchase caused anxiety about wasting money that could go to savings. But with insured income as backup, I loosened up.

On the weekend, I’ll treat the family to ice cream or a meal out. And I happily bought that big shiny new toolset that caught my eye.

Of course, I’m still careful about needless spending. But income protection brings freedom to enjoy life’s little pleasures without sweating every dollar.

My buddy James puts it best: “I sleep better knowing income protection lets me buy a round of beers for the crew on Friday without sweating it!”

So if you’re depriving yourself of all extras for the sake of frugality, consider income protection. Not only will your family be secure, but you can also splurge on what matters most to you!

Paying It Forward

My journey to get income protection was long and painful. But now that I’m covered, I want to help others avoid going through what I did.

When new trainees start with our construction crew, I take them under my wing. I explain why income protection is so critical for our line of work.

And I volunteer time reviewing insurance policies for friends who are confused by the fine print. After becoming an expert getting my own cover, I’m happy to pass on that knowledge.

My legacy will be a whole generation of tradies who never need to stress over an injury leading to financial devastation. How cool is that?

If my experience can educate even one more tradie to protect their income, it was all worth it. As the old saying goes – learn from my mistakes, because you can’t live long enough to make them all yourself!

Looking Ahead With Peace of Mind

Thanks to income protection, I can now look confidently towards the future knowing an illness or injury won’t bankrupt my family.

Next month we’re having our bathroom renovated, something we’ve put off for years from worry about the expense.

And in the spring, we’re finally taking that beach vacation I’ve been dreaming about since I was a kid!

With insured income, I have the security to start checking off goals I’ve had on hold forever. That true peace of mind is priceless.

While the work I do will always have risks, they no longer keep me up at night. I have the tools to support myself and my loved ones no matter what life throws my way next.

Isn’t that what we all want? To live life to the fullest without constant fear of what-ifs derailing everything?

My journey has taught me income protection delivers exactly that – the safety net to really embrace each day with joy. Please don’t wait to get covered like I foolishly did. The security is so very worth it.

Now who wants to grab a round at the pub? My wallet’s open!

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