I have spoken with hundreds of tradespeople over the last few years, and one of the common questions I get is whether or not they should bother with income protection.

Most tradies requesting quotes through this website will be interested in public liability, tool insurance and income protection.

When they receive their quotes, typically a tradie will go ahead with the public liability simply because they need it for their licence or to get on site, and they will go ahead with the tool insurance because it is fairly inexpensive.

But when it comes to income protection, many tradies look at the quote and think to themselves, “Do I really need to spend more money on insurance?”

A Fair Question

All Australians are experiencing the rising cost of living in one way or another. For some people it’s not so much of an issue, but for most of us we are all looking at ways to save money.

Working on a roof.With that in mind, questioning the need for income protection is certainly a fair and reasonable thing to do.

Income protection insurance is not what you’d call cheap, but nor is it overly expensive either, especially when you consider the benefits that it provides.

So how do you know whether or not you should have income protection insurance?

Ask Yourself This…

Asking yourself one simple question is the easiest way to determine whether or not you need income protection:

How would I pay my mortgage or rent, and keep food on the table if I couldn’t work?

If you don’t know the answer, then chances are you need to at least consider income protection.

Statistics show that the average Australian would run out of money within three months if they were unable to work. After that time you would start defaulting on your mortgage and credit cards, and pretty quickly you’d be in some serious financial strife.

Of course you can avoid all of that unpleasantness simply by keeping yourself properly insured.

What Do I Think?

Having been in the insurance industry for so long, and having dealt with so many tradespeople, I would have to say that income protection is one of the most important forms of insurance for a tradie.

If you’re on wages at least you have sick pay to fall back on, but even that will only last for so long. You might also be able to claim on worker’s comp, however that’s only going to cover you for incidents on the worksite.

Whilst income protection is important for tradies on wages, I’m my opinion it is absolutely vital for any subcontractor or self-employed tradesman. You have no sick pay and no access to work cover in most cases, so if something happens you are completely on your own.

I like to put it this way: Not having income protection is like working on a roof without a harness. If you don’t fall then you’ll be fine, but if you do fall there is nothing that’s going to save you besides good luck.

Are you willing to let your financial security rely on luck?

It’s Up To You

At the end of the day it’s up to each individual tradie to decide if they want income protection insurance, unless of course they’re contracting to company that makes income protection mandatory.

None of us like to pay our insurance premiums, whether it’s our car, our home or our business. Sometimes we may complain about needing too much insurance, but I tell you what, no one ever complains about having too much insurance when they need to make a claim.

Unless you want to spend your life on a Centrelink disability pension, taking out an income protection policy is a pretty good idea if you ask me.

PS. Yes I do have income protection insurance!


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