Income Protection Guide
Companies (The Pty Ltd’s)
If your business is run as a company entity (Pty Ltd) WorkCover requires you to take out a workers compensation insurance policy. A workers compensation policy will cover your workers (permanent or casual) in the event of them suffering a work-related injury.
I’m A Sole Trader
If you’re running your own business as a sole trader ship, worker’s compensation isn’t a requirement under the Worker’s Compensation Act 1987. WorkCover firmly advises sole traders and proprietors in partnerships to take out personal accident cover or an income protection insurance policy.
An Income Protection Insurance policy will protect you and your family financially, by providing you with an income if you are unable to perform your duties at work due to injury or illness.
Why Do I Need Income Protection?
As Workers Compensation is not available to sole traders, an income protection policy will offer you the added financial protection if you do have an accident, injury or illness.
Let’s Look At Some Examples:
Injury / Illness > Can’t Work > No Income Protection > No Cashflow
Injury / Illness > Can’t Work > Income Protection > Cashflow
If you can’t earn an income from working due to injury or illness. I would really be asking myself the following questions:
- Who’s going to pay the mortgage?
- Who’s going to pay the water, electricity and council bills?
- Who’s going to support the family?
- Who’s going to help pay for the medical and rehabilitation costs?
The simple answer is income protection.
Income Protection will replace up to 75% of your income if you can’t work because of injury or illness.
Income Protection Benefits:
- Benefit periods of up to age 65
- Helps maintain living standards
- Pays for medical treatment
- Pays for recovery costs
- Helps to pay the bills when you can’t
With more than 60% of injuries happening outside the workplace it’s critical you understand the real need to protect you and your family’s lifestyle from any unexpected event.
For more information, read our ‘Myth 3 – What About Workers Compensation – Won’t That Cover Me?’ article in our Why’s Education Centre.