Introduction
The fact of living is evidently a struggle for survival and with this, we are constantly faced with risks and injuries. More so, accidents are inevitable and unpredictable elements that plague and characterize this struggle. With regards to this, it is pertinent that we as humans and more importantly people in a line of work where we are continually faced with inexplicable dangers acquire a form of protection from any eventuality that may prompt damage or pose a threat of risk and injury to us.
From the squeaking of the worn-out bolts and bearings, the pounding of the old pistons, the clanking and grinding of the non-lubricated gears to the hammering of the gargantuan machinery, every moment and action is a hibernating recipe for disaster waiting to unfold in a construction site. To this end, the need for income protection comes as imminent and mandatory for any construction worker hoping to lead a relatively secured and safe career in his line of work.
So what should construction workers know about income protection insurance?
Most people understand the concept of insurance generally but are unable to relate this fact to the numerous forms of variations available and accessible to them. As it concerns our topic of interest, income protection insurance (IPI) or permanent health insurance (PHI) as it was previously referred to as a form of insurance policy that avails a satiable degree of compensation and payment benefits up to 75% of a policyholder’s income who are unable to execute their work owing to accidents or injuries incurred in the line of service or even when not attending to work-related matters. At this point, we will throw more light on what construction workers should know about the income protection policy.
- The income protection policy is not the same as work cover
Most construction workers frequently confuse IPI with work cover. They are entirely different. Workcover is a federal government compensation plan in which employers pay a certain amount of money called a premium to the government depending on the number of employees on their worklist while in return the government agrees to compensate them in the event of injury while attending to any work-related matters. In other words, this only applies if you are injured in a work-related circumstance and payment is paid only until the level of disability is ascertained. Hence your claim is null and void until fully probed. Whereas IPI covers your income status in the event of injury or sickness that might arise absent from your line of service.
- Tax-free benefits
Unlike most benefits paid on the various insurance policies, those of IPI are absolutely tax-free. This means that policyholders get as much as 75% of their total benefits paid in a full package without deducting income-based tax or national insurance contributions. To this end, once a period of coverage is valid in the event of an injury or illness, benefits are paid tax-free from the holder’s premium plan.
- Undeniable policy renewal and waiver of premium
An insurance company may cancel or deny a renewal request in some insurance plans but this does not apply to IPI. So long as policyholders pay their premium, the company cannot cancel their IPI. It is also grossly important to mention that IPI can offer policyholders a waiver of premium. This is a plan in which the company does not need the premiums while paying the benefits from the policy whereas the cover for the IPI continues normally.
So when can a construction worker make an income protection claim?
- Incapacitation due to injury or sickness
In the event of injury or sickness which renders an IPI policyholder incapacitated and unable to earn income, the individual can make an income protection claim. Hence, an IPI claim can be made when the injury is incurred either when attending to work-related matters in the line of duty or not so long as it renders the policyholder unable to earn income.
- Valid coverage period
Just like every insurance policy, IPI comes with a coverage period according to the provider and the policyholder. A valid coverage period in the absence of a waiver of premiums entails that premiums on the IPI policy are paid up to date. The coverage policy and period can protect up to 75% of the policyholder’s income so be sure to enquire about your provider before you take out an IPI.
- Free limit
This is a very important point that must be considered before taking out an IPI. This varies among different regions and providers alike. The concept of free limit entails that benefits and indeed claims can only be paid if the injury was incurred while and if the policyholder is permanently resident in the area described in the policy. This means that outside this defined region or area, the policy is invalid and any claims or injuries incurred during this time cannot be paid by the insurance provider.
So the next big question that follows in the mind of a construction worker is why I should sign up for an IPI.
Why construction workers should get income protection insurance
- Protection and income security
As we earlier stated, we live in an uncertain world where anything can abruptly happen. To pacify our fears and uncertainty, it is crucial that we obtain a form of security and protection against these uncertainties. According to a 2005 report from the Australian Bureau of statistics, employed tradespeople such as construction workers represent the majority of workers who are at the most risk of injury at work. To this end, it is important to ensure your income in the event of any incapacitation that may render you unable to earn income.
- Offsetting dependencies and financial obligations
Most construction workers are individuals with families, aged parents, younger ones and other people who depend on them for breadwinning. It, therefore, comes as no surprise that an injury that incapacitates you from performing any paid work will go a long way to not only devastate your life but also the lives of these dependencies. Also, other financial obligations such as mortgages, bills, food, shelter and education can take a heavy toll on you when there is no means of offsetting them; hence it is very important that construction workers obtain an income protection policy that would ensure they and their dependencies are continually covered in other financial obligations in the event of an accident or injury.
- Benefits are fully paid and up to date.
The benefits from income protection insurance are made weekly or monthly depending on the provider and are paid in full and up to date. As we mentioned earlier, these benefits are tax-free. Hence, with an up-to-date and full benefit payment, the injured policyholder can be assured of a safe and smooth recovery devoid of any financial worries that may contribute to stress or hinder full recovery. In other words, on your way to recovery, your financial obligations are the least of your problems because your benefits are paid to cover them all.