Sickness and Accident Insurance

One of the most commonly required forms of cover for tradesmen is sickness and accident insurance.

Sickness and accident insurance, also commonly known as accident and illness insurance, is designed to protect your income if you are unable to work for a period of time.

Most Australian insurance companies offer this form of cover, and one of the easiest ways to get yourself covered is via an insurance broker. In this article we will take a closer look at this important form of cover.

How Does It Work?

Sickness and accident insurance can replace a large portion of your income for a set period of time whilst you are unable to work due to illness or injury.

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The policy will generally have a set benefit amount which will be paid to you each fortnight or month (depending on the policy) as well as a waiting period and a benefit period.

The waiting period is the amount of time you must be unable to work for prior to claiming, and the benefit period is the maximum time you can continue to receive benefits for once you are on claim.

Who Needs It?

Every tradesman can benefit from having a sickness and accident insurance policy in place, however it is most commonly taken out by self-employed tradies since they have no access to sick leave or worker’s compensation.

But even for tradesmen who do have access to sick leave, a sickness and accident policy will still provide a greater level of protection in the case of a longer term absence from work.

Is It The Same as Income Protection Insurance?

One of the biggest myths about trade insurance is the belief that sickness and accident insurance is the same as income protection insurance.

Whilst both policies have many similar attributes, a sickness and accident policy is generally considered to be inferior to a proper income protection policy.

There are numerous reasons for this, but one of the main reasons is because accident and illness is classed as a ‘cancellable insurance’.

This means that the insurance company can refuse a renewal at any time for virtually any reason. If your health has deteriorated or you have made a few claims, the insurer can simply refuse to offer you a renewal, which will make it difficult to obtain cover elsewhere.

Proper income protection on the other hand is classed as ‘non-cancellable insurance’. This means that the insurer must renew your policy provided that you keep paying the premiums.

This is a major difference, and is just one of the differences between these two covers that leads most experts to agree that proper income protection insurance is a superior form of cover, especially for tradesmen.