How A Miners Income is Assessed
A very important question that we are often asked is - How does an insurer assess my earnings?
We have provided a brief summary below with some suggestions on what you can do to improve your chances of getting the best possible Income Protection Insurance cover.
When it comes to applying for Income Protection, it can be a long and tedious process if you do not have all your paperwork ready to go. Unlike Life Insurance, Income Protection requires proof of earnings to substantiate the sum insured and the insurer will not always insure all your earnings.
How it all works
Longevity in a position and how long your mining contract has to run is very important for an underwriter to consider when you are applying for income based insurance products such as Income Protection Insurance. When assessing the current and future earnings of a miner, the insurance company needs to assess whether the current level of earnings are a fair estimate of earnings over the long-term and if they are likely to continue into the future. In particular for miners it needs to be established if things like allowances would be included in your income if you were to leave the mines and return to work offsite.
As a minimum, an insurer should happily cover your base salary plus superannuation guarantee contributions and then consider REGULAR overtime, bonuses and allowances on a case by case basis, however please note these are often EXCLUDED when an insurer is assessing your income. The emphasis is often on whether these additional earnings have been consistent over a period of years and whether they are likely to continue into the future.
You adviser will work with you to put a case together to your insurer to present your earnings in the best possible light to ensure you can maximize your Income Protection benefit amount if you wish to do so. Remember you can always insurer yourself for lesser amount if you want to keep the cost of your insurance down and provide yourself with just a base level of cover to protect yourself for the bare minimums.
Here are our top tips to maximise your chances of getting the best possible Income Protection Insurance
- Put together as many tax returns as possible that substantiate your past earnings.
- Obtain a copy of your current employment agreement / contract.
- Ask for a letter from your Accountant estimating your full current years earnings and possible future earnings if this can be estimated using a fixed term contract.
- Ask your employer to draft a letter validating your past and present earnings and likelyhood of future earnings.
For more information on how earnings are assessed for Income Protection Insurance please speak with your Financial Adviser or contact us directly.
Please note that the information in this article has been provided for information purposes only. It does not take into account any of your personal circumstances and should not be seen in any way as advice or as a recommendation.
To obtain a quote on your miners insurance simply complete our online quote request.