Income Protection for Tradesmen

Getting the right Disability Income Protection product for tradesmen such as Builders, Plumbers and Electricians is essential due to the nature and risks of their occupation.

Accidents and ACC (Cover Plus Extra)

There is a 51% chance if a Tradesman claims on Income Protection it is the result of an accident[1]. In New Zealand when you have an accident and can’t work you would more than likely also receive compensation from ACC.

Cover Plus Extra is a product for Self-Employed people so they can manage their level of cover and ACC Levies. As a self-employed person you can dial your cover up and down, increasing or decreasing your potential compensation and levy you pay ACC. There are other benefits with Cover Plus Extra that warrant further investigation however it pays to get advice before changing your level of cover.

ACC and Disability Income Protection

Some Income Protection polices offset any benefit against any compensation paid by ACC. So you could be paying for something you can’t claim on. Any potential benefit offset can be managed by choosing the right policy, e.g. Mortgage Protection has no offsets. There are also Loss of Earnings polices that limit the amount that can be offset by compensation you receive from ACC.

Some Insurance Advisers may reduce your level of Cover Plus Extra and use the savings to take out a private Disability Income Protection policy. However you must be careful when doing this as ACC has some unique advantages that are not available with private insurance.

• ACC have a 7 day wait period, the shortest wait period for private cover available is four weeks
• You are reducing other benefits such as Fatal Entitlement Benefit
• ACC is only rated by occupation, private cover takes into account age, therefore gets more expensive as you get older
• Private Insurance Polices may exclude pre-existing injuries

Tradesmen need to consider what cover they have with ACC and how it works before they take out an Income Protection policy.

For more information give the team a call on 09 9720063 or email contact@comparenow.co.nz

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[1] New Zealand Gen Rec Claim Statistics 2004-2008