Tradespeople and labourers may face the risk of getting hurt due to the physical nature of trade work. While Workers Compensation will cover you for some things, it’s important to also consider life insurance.
If you were to pass away, or your ability to work is disrupted by illness or injury, the different types of life insurance can help safeguard your family and lifestyle.
What is life insurance?
There are 4 common kinds of life insurance products that can help provide financial protection for you and your loved ones for different events.
Life insurance (or ‘death cover’) pays a lump sum to your beneficiaries if you pass away or are diagnosed with a terminal illness.
Total and permanent disability (TPD insurance) provides a lump sum payment if you become totally and permanently disabled (as defined in the relevant policy).
Trauma (critical illness insurance) pays a lump sum if you suffer a defined medical illness or condition, which could include cancer, a stroke or heart attack.
Income protection insurance pays up to 70% of your regular monthly income if you’re too sick or injured to work for an extended period of time.
How do I know if I need life insurance (also known as death cover) or income protection?
You might benefit from life insurance if you have a partner, children or other people depending on you financially. If you were to pass away, a life insurance lump sum payout could provide financial support for the people closest to you. Life insurance is a way of looking after your family, to help them settle any outstanding debts and cover ongoing living expenses if you were no longer around to support them.
Income protection could support you and your family if you weren’t able to work due to illness or injury. Knowing you still have a monthly income when you need time off work to recover can relieve a lot of stress over how you’ll keep up with the bills and cover your living expenses.
Which life insurance product should tradies consider?
The right policy depends on your personal circumstances, including your income, age and family situation. Each insurer and their products vary in what they cover, so it’s a good idea to compare your options and consider if they are appropriate for you.
There are also different ways to take out cover.
- Bundled policies are packages that include multiple types of insurance, like life, TPD and trauma cover. Some people might prefer bundled life insurance as it gives them access to multiple insurance types at a typically cheaper cost (through a multi-policy discount).
- Standalone policies are independent policies where each type of cover you take out is separate. For example, some tradies — such as those without dependants — may only want income protection, others may only want trauma insurance. Standalone policies offer the flexibility to make that possible.
Factors that impact insurance for tradies
As a plumber, electrician, carpenter or other tradie applying for life insurance, you’ll likely need to answer a series of questions to give the insurer an understanding of your work environment and the type of duties you perform.
1. Working at heights
Free life insurance quotes for tradies
When you apply for cover, the insurer might ask whether you work at heights and how often.
If you work beyond a certain height, the insurer might take the associated risk into consideration. This may result in a loading on your premium, which means the premium you pay is adjusted up so the insurer can still provide you with cover even if you do work at heights.
2. Exposure to dangerous substances or high voltages
The insurer might also ask you about the equipment, chemicals, or other substances you may use in your work. If you are exposed to any dangerous substances or high voltage electricity, the insurer might have to consider this when assessing your application. They will then confirm whether an exclusion or loading will apply to your policy, to account for any injuries that may result from exposure to these risks.
3. Working on site
If you work on site, rather than in an office, the insurer might ask you about your work environment to get a better idea of how much risk is involved in your job. For example, they may ask if you work on scaffolding at heights, operate heavy machinery or if you work in an underground mine.
The insurer will use this information to assess whether a loading or exclusion may need to be applied to your policy, or whether they are able to provide cover altogether for more high-risk environments.
While safety always comes first on a work site, there are often inherent risks and hazards in work environments, and it’s important to disclose them when applying. Providing this information can ensure you have confidence about what you’re covered for, which is important if you ever need to claim.
4. Don’t forget business expenses
If you’re a tradie running your own business, you may also want to consider business expenses insurance. This insurance helps cover your continuing business expenses if you become ill or injured for an extended period of time. You can chat to our specialist consultants to compare your options.
To determine your eligibility for any one of these types of insurance, you can complete a pre-assessment by calling a qualified Lifebroker insurance consultant. They can be contacted on 13 54 33, Monday–Friday, 9am–5:30pm (AEST)
How do I find the right policy for me?
If you’re considering life insurance, income protection, critical illness insurance or total and permanent disability insurance (or even business expense cover) to keep yourself and your family financially protected, you’re in the right place. Lifebroker compares insurance products from a range of Australia’s leading providers.
A good place to start is to consider how much cover you might need. You can use our calculator to help work out the amount of insurance that might suit you before comparing insurers and policies.
For business expense insurance, you can chat to our specialist consultants to compare your options. They can be contacted on 13 54 33, Monday-Friday, 9am-5:30pm (AEST).
Lifebroker only provides general advice, which means we haven’t considered your individual financial situation, objectives or needs. You should read the relevant Product Disclosure Statement, along with the Lifebroker Financial Services Guideto understand if the product is right for your financial situation or needs.