Contractors play an important role in construction projects. More often than not, they coordinate with companies and people looking to build an estate and connect them with the material, labor, and other essentials required for the successful building of construction projects. Whether it is a retail store, home, or an interior overhaul, contractors are the unsung heroes in the industry of modern establishments.
However, contracting jobs are project-based. As a contractor, it is not very easy to get jobs one after another, as schedules may overlap, and unideal weather conditions may turn clients away. While you may be used to making your per-project income stretch, you can never predict when months without work may completely stop your flow of income for an extended period. It is pertinent to look into Contractor Income Protection, which is essentially an insurance plan designed for the contracting line of work.
It Protects Your Income
As its name suggests, a Contractor Income Protection plan is the most fool-proof way in which you can protect yourself against months without a source of income. Primarily, you can cover about 70% of your contract income on a short or long-term basis, depending on the policy that you choose.
Whereas independent contractors will have to pay the premium themselves, company-tied ones are often given a percentage match by their employers. If you are with a company and unaware of whether or not insurance are part of your benefits package, then, by all means, find out. It will substantially help you in the future, even if you have to pay the premium yourself.
What to Look Out For
Like most other insurance policies, Contractor Income Protection can be tricky to work around, especially if you are unfamiliar with how it works. There are a couple of things that you have to look out for, as they can substantially reduce the value that you receive when your insurance company does not cover them. For instance, your income may consist of dividends, which some companies do not cover.
Generally, only the gross project income that you receive is a part of your income protection claim. The dividends make up the adjusted gross income, which may or may not equate to your gross income. Therefore, do check with your company to determine if you can benefit from its value.
Additionally, read the fine print of your income protection policy and negotiate a better deal with your financial advisor. Some plans will only grant you the money if you can no longer carry out any work – not just contracting work. That can be a bit tricky because you will be in a position where your only option is to try out other lines of work. As a result, choose a policy that is specific to the contracting industry.
Choose a Company That Understands Your Job
Not all insurance companies understand your job as a contractor. As a result, they may make things difficult for you, as opposed to being helpful. Choose a company that understands the nuances of the contracting industry.
For instance, they should know about how project-based contracts work, about how multiple projects can or cannot overlap, and how long you have to be jobless before it is viable to release your premium. By choosing an insurance company that understands your job, you are less likely to run into complications or complicated claiming processes.
Being a contractor is tough, especially in a competitively-dense market. However, the hard work pays off when you see skyscrapers that stand as a result of your planning and organization. In a quickly modernizing world, your skills are necessary, so protect your income with the right insurance policy.