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What Is The Difference Between Personal Accident Insurance And Income Protection?

Rhino Trade Insurance 15 December 2023

For tradesmen and women, the risks associated with the job you do can be a cause for concern. Accidents, injuries, and illnesses can strike at any time, and when they do, the consequences can be heavy! To mitigate these risks, it's essential to consider the right insurance cover for your business. Two common types of insurance that often come up in this context are Personal Accident Insurance and Income Protection Insurance. But what's the difference between the two, and which one is right for you?

Personal Accident Insurance: Protecting You Against Sudden Shocks

The purpose of Personal Accident Insurance is to shield you financially in the event of an unexpected injury or accident that keeps you from working. For tradesmen and women, you more than likely are self-employed or work as a contractor. This type of insurance is particularly important, as the nature of the job often exposes individuals to a higher risk of accidents - especially on dangerous trade sites. 

Key Features of Personal Accident Insurance:

Personal Accident Insurance primarily covers injuries resulting from accidents. This could include anything from a fall at a construction site to an injury brought on by a power tool. If an accident happens, Personal Accident Insurance pays out a lump sum amount. This money can be used to cover medical expenses, rehabilitation, or to compensate for the loss of income due to the accident. When taking out a policy with Rhino Trade Insurance, you can choose to protect yourself with a lump sum payment of up to £50,000. 

For independent contractors, Personal Accident Insurance is crucial. When you work for yourself, you are not covered by sick leave or other benefits in the event that an accident or injury prevents you from earning your regular income. Rather, you will have to bear the financial consequences on your own, which will include lost income, unpaid bills, and a great deal of additional stress.

Any injuries or accidents that occur while you're not at work are also covered by Rhino's first-rate Personal Accident Insurance. You are, therefore, still insured whether you are knocked down by a car on the way home from the shop or fall off a ladder while cleaning up the loft.

In the event of your accidental death - the worst-case scenario - your next of kin can also file a claim with Rhino. In this situation, your designated next of kin - typically a spouse or family member - will receive the money. It is important to carefully review the policy materials in order to fully comprehend the terms, restrictions, and any exclusions.

Income Protection Insurance: Safeguarding Your Livelihood

Income Protection Insurance, on the other hand, is designed to protect your income in case you can't work due to an accident, injury, or illness. Unlike Personal Accident Insurance, which focuses on lump sum payments for specific injuries, Income Protection provides a regular income stream of money during the period of your inability to work (up to a 12-month period with Rhino Trade Insurance). 

Key Features of Income Protection Insurance:

Income Protection Insurance replaces a portion of your monthly income when you're unable to work due to illness or injury. This regular payout helps maintain your financial stability during recovery. Unlike Personal Accident Insurance, Income Protection also covers illnesses that prevent you from working, not just accidents. This is crucial, as illnesses can often have a more extended impact on your ability to work.

With Rhino, you can tailor your Income Protection Insurance to meet your specific needs. You can choose the precise amount of cover and the length of the policy to ensure you receive the optimum cover for your situation. You can insure for monthly payments up to £2,500 and choose to receive them across 3, 6, 9 or 12 months. 

It makes sense to get this kind of insurance as a self-employed tradesperson. When you work for yourself, you are not eligible for Statutory Sick Pay (SSP) or any other type of sickness package. That's why a few days away from work might have a significant financial impact on you. Picture what that means for your bank account if your absence lasts for several months! For most people, the financial stability of you and your family would suffer greatly if you were unable to earn a living, and that's the ultimate benefit of Income Protection Insurance. 

Comparing the Two: Which One is Right for You?

The choice between Personal Accident Insurance and Income Protection Insurance depends on your individual circumstances, preferences, and needs. At Rhino, it's easy to take out both policies at the same time; however, let's break down the comparisons for better understanding:

Type of Cover:

If you're primarily concerned about accidents, Personal Accident Insurance is more suitable.

If you want comprehensive coverage for both accidents and illnesses, Income Protection Insurance is the better choice.

Payout Structure:

If you are looking for a lump sum payment, then Personal Accident Insurance is your go-to policy. Income Protection Insurance offers a regular monthly income of up to 12 months. 

Peace of Mind:

Personal Accident Insurance provides peace of mind when you are working in case you suffer from an accident. Income Protection Insurance, on the other hand, offers more comprehensive peace of mind, covering injuries from accidents and illnesses. Remember that Income Protection Insurance covers more than simply workplace sickness or accidents. You are covered by Rhino's insurance even when you are not working. See the Policy Wording paper for a detailed explanation of your coverage.

Make The Right Choice With Rhino Trade Insurance

In the end, the choice between Personal Accident Insurance and Income Protection Insurance depends on your specific needs and priorities. If you're primarily concerned about accidents and want a quick lump sum payout, Personal Accident Insurance might be the better option for you. On the other hand, if you want comprehensive coverage for accidents and illnesses, along with regular income replacement, Income Protection Insurance is the way to go.

For many tradesmen and women, having both types of insurance might be the most sensible approach. Personal Accident Insurance can provide immediate relief in case of accidents, while Income Protection Insurance ensures you have consistent financial support if you face a more prolonged period of inability to work due to an accident or illness.

In any case, it's crucial to carefully assess your individual circumstances, consult with one of Rhino's expert insurance advisors, and choose the insurance products that best align with your needs and budget. Get all the information you need, along with a quick and easy quote, today by calling 0116 243 7904. 

About The Author Phil McCormick

Experienced in brand marketing and content. Most of that lovely communication you see online will be from Phil. social media, emails, videos, how to make a bacon sarny? You get the gist!

Trade most identified with: Electrician - It’s our Phil’s job to map out all our communications and make sure the signal works! Also, he’s one of the cockiest blighters in the team so electrician fits perfectly!

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