As a tradie, your body is your business. Learn why income protection is essential, what it costs, and how to get the right cover for your trade.
Comprehensive guide to income protection waiting periods: how they work, types, costs, and strategies to choose the right waiting period for your situation
Life insurance coverage and premiums for high-risk occupations in Australia
Self-employed life insurance guide for sole traders, contractors, and business owners with special strategies
Let's be honest: if you're a tradie, your hands, back, and body are your business. Whether you're an electrician, builder, or carpenter, you can't do your job from a hospital bed or while recovering from knee surgery.
The statistics are stark. According to Safe Work Australia, the construction industry has one of the highest injury rates in the country. In 2023-24, there were 24 serious claims per 1,000 workers in construction - nearly triple the all-industry average of 9 per 1,000.
What happens if you can't work?
Income protection insurance pays you a monthly income if you're unable to work due to injury or illness. It's not a lump sum - it's ongoing income replacement that can continue for years or until you return to work.
This guide explains everything tradies need to know about income protection: what it covers, what it costs, how to get approved, and the key decisions that affect your premiums.
Income protection insurance (also called "salary continuance" or "disability income insurance") replaces your regular income if you're unable to work in your occupation due to:
Benefit amount: Most policies pay up to 70% of your pre-disability income (75% with some insurers).
Why not 100%? There are two reasons:
Monthly benefit example:
Payment duration: Benefits are paid monthly for as long as you remain unable to work, up to your chosen benefit period (2 years, 5 years, or to age 65).
The waiting period is the time between when you stop working and when benefits start. Think of it as an excess, but in days instead of dollars.
Common waiting periods:
The tradeoff: Shorter waiting period = higher premiums but benefits start sooner.
Example for a 40-year-old builder ($5k/month benefit, to age 65):
Key question: Can you survive financially for 30, 60, or 90 days without income? Your answer determines your ideal waiting period.
Get indicative quotes based on your trade, age, and coverage needs. Compare options from 8 major Australian insurers in minutes.
Get Your Free QuoteUnderstanding why insurers classify tradies as higher risk helps you understand your premiums - and how to potentially reduce them.
Safe Work Australia statistics (2023-24):
Most common tradie injuries:
Average time off work after serious injury: 6.2 weeks for construction workers (vs 4.8 weeks all industries).
High-risk activities that insurers assess:
| Risk Factor | Trades Affected | Impact |
|---|---|---|
| Work at heights | Roofers, scaffolders, painters | +40-80% loading |
| Electrical exposure | Electricians, solar installers | +25-40% loading |
| Heavy machinery | Operators, concreters | +30-50% loading |
| Confined spaces | Plumbers, cable installers | +20-40% loading |
| Manual handling | All trades | Base risk factor |
| Outdoor exposure | Most trades | Minor loading |
If you work fly-in/fly-out or drive-in/drive-out (common for mining-adjacent trades), insurers apply additional loadings:
The benefit period is the maximum time you'll receive payments while unable to work. This is one of the biggest decisions affecting your premium.
Option 1: 2-Year Benefit Period
Option 2: 5-Year Benefit Period
Option 3: To Age 65 Benefit Period
Real-world consideration: The average income protection claim lasts 2.5 years. However, 25% of claims extend beyond 2 years. If you suffer a serious back injury at 45 that prevents you from ever returning to physical work, a 2-year policy leaves you without income from age 47 to 65.
This is the single most important policy feature for tradies.
"Own Occupation" Definition:
"Any Occupation" Definition:
Critical warning: Many super fund income protection policies use "any occupation" definition. If you're relying on super-based cover, check the definition carefully.
Agreed Value:
Indemnity:
Self-employed consideration: If you're a contractor or own your business, your income may fluctuate. Agreed value gives certainty. With indemnity, a bad quarter before your injury could reduce your benefit.
Let's look at real premium examples across different trades. All examples are for a 40-year-old non-smoking male with $7,000/month benefit, 30-day waiting period, and to age 65 benefit period.
| Feature | Electrician | Plumber | Carpenter | Builder (hands-on) | Builder (supervisor) |
|---|---|---|---|---|---|
| Monthly Premium | $175 | $170 | $180 | $185 | $145 |
| Annual Cost | $2,100 | $2,040 | $2,160 | $2,220 | $1,740 |
| Occupation Class | B/BB | B/BB | B | B | BB |
| Premium vs Office Worker | +68% | +63% | +73% | +78% | +39% |
| Typical Loading | +60-80% | +55-75% | +65-85% | +70-90% | +35-50% |
Premiums shown are indicative for 40yo non-smoker, $7k/month benefit, 30-day wait, to age 65. Actual premiums vary by insurer and individual circumstances.
| Feature | 30-Day Wait | 60-Day Wait | 90-Day Wait |
|---|---|---|---|
| Monthly Premium | $175 | $145 | $125 |
| Annual Saving vs 30-day | — | $360/year | $600/year |
| Days Without Income | 30 days | 60 days | 90 days |
| Recommended If | Limited savings buffer | 2 months expenses saved | 3+ months expenses saved |
Longer waiting periods significantly reduce premiums but require more savings to cover the gap.
| Feature | 2-Year | 5-Year | To Age 65(Recommended) |
|---|---|---|---|
| Monthly Premium | $110 | $145 | $185 |
| Annual Saving vs Age 65 | $900/year | $480/year | — |
| Maximum Claim Duration | 2 years | 5 years | Until retirement |
| Risk Level | High - long-term disability not covered | Medium - most claims covered | Low - full protection |
To age 65 benefit period costs more but provides complete protection against career-ending injuries.
Getting income protection as a tradie isn't just about price - it's about getting accepted in the first place. Here's how to maximize your chances of approval at reasonable rates.
About your occupation:
About your health:
About your income:
Automatic declines or heavy loadings:
Exclusions you might receive:
1. Accurately describe your role
2. Address health issues proactively
3. Shop around - occupation appetites vary
4. Consider splitting policies
5. Timing matters
See which insurers offer the best rates for your specific occupation. Get indicative quotes from 8 Australian insurers - free, no obligation.
Get Your Free ComparisonMany tradies have some income protection through their super fund. Should you rely on it or get a personal policy?
Advantages:
Significant disadvantages:
Advantages:
Disadvantages:
Personal policy with "own occupation" definition is strongly recommended for tradies. The definition difference alone makes it worth the extra cost.
Why "own occupation" matters - real example:
Scenario: 45-year-old carpenter suffers severe shoulder injury. Can no longer swing a hammer or work overhead. Could potentially work in a hardware store or as a building inspector trainee.
For a tradie whose skills are physical and occupation-specific, "own occupation" cover is not optional - it's essential.
Running your own business adds complexity to income protection. Here's what self-employed tradies need to know.
As a sole trader or contractor, you'll need to document your income clearly:
Required documents:
Income calculation methods:
Standard income protection covers your personal income. But what about business overhead?
Business expenses insurance covers fixed costs while you're disabled:
Cost: Typically $50-100/month for $5,000-10,000/month business expenses cover.
Who needs it: Any tradie with a workshop lease, equipment finance, or employees.
Sole trader:
Company or trust structure:
Partnership:
You must be totally or partially unable to work in your occupation for the duration of your waiting period before benefits begin. With a 30-day waiting period, you need to be unable to work for 30 consecutive days before payments start. Benefits then continue monthly for as long as you remain unable to work, up to your chosen benefit period.
Yes, back injuries are one of the most common income protection claims, especially for tradies. However, if you have a pre-existing back condition, it may be excluded from your policy. If you're healthy when you apply, back injuries will be covered. For existing back issues, some insurers offer cover after a 2-3 year exclusion period with no further treatment.
Yes. Income protection covers you 24/7, not just at work. Whether you injure yourself on a construction site, playing weekend footy, or in a car accident on holidays, you're covered if you can't work as a result. This is a key advantage over workers compensation, which only covers workplace injuries.
Most policies include partial disability benefits. If you can return to work part-time or in a reduced capacity, you'll receive a partial benefit. For example, if you're earning 50% of your pre-disability income, you might receive 50% of your benefit amount. This encourages gradual return to work without losing all support.
Yes, if you pay premiums personally (not through super), the premiums are generally tax deductible as they relate to earning assessable income. At claim time, benefits are tax-free if premiums were paid personally. If premiums are paid through super, they're not deductible (super contributions may be), but benefits are taxable as income.
It depends on the claim. Minor claims (cut finger, simple sprain) that healed completely usually don't affect applications. Major claims (back surgery, crush injury) may result in exclusions for related conditions or higher premiums. Multiple claims may trigger decline. Be honest about claims history - failing to disclose can void your policy.
Income protection is designed to work alongside WorkCover/workers compensation, not replace it. Workers comp covers workplace injuries only, while income protection covers injuries and illnesses anywhere, anytime. If you receive both, your income protection benefit is usually reduced to ensure total payments don't exceed your pre-disability income.
As a tradie, you've invested years building your skills, your reputation, and your income. One accident - on site, on the road, or on the weekend - can take that away.
Key decisions to make:
What to do now:
Your body is your business. Protect it like the asset it is.
Related occupation guides:
Compare income protection options from 8 Australian insurers. See exact costs for your trade, age, and coverage needs. Free quote takes 3 minutes.
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