Just because you're a miner doesn't mean you can't get life insurance or income protection. Here's what you need to know.
Miners face challenges getting life insurance thanks to the high-risk nature of the industry. But insurers assess your insurability based on the actual work you do, not your job title. If you're in a high-risk role you could still be insurable.
Two of the best policies for miners are life insurance and income protection insurance.
- Life insurance. Your family receives a lump sum payment in the event of your death.
- Income protection insurance. Get monthly benefit payments of up to 75% of your income if you're injured or sick and unable to work.
Read on to learn more about insurance for miners.
What are some of the risks miners face?
Miners face serious dangers at work. Potential risks include:
- Gas explosions
- Hearing loss
- Respiratory health problems
- Cave-ins or tunnel collapses
What types of insurance should miners consider?
Aside from life and income protection insurance, miners might also look at trauma or TPD insurance. Here are the details, benefits and drawbacks of each policy type.
|Total and permanent disability (TPD)|
Some insurers let you bundle policies together, or give you extra options. You could get a life insurance policy with a TPD benefit option, for example.
How do insurers classify miners for insurance purposes?
Income protection insurance depends on how your occupation is classified by your insurance company. Premium costs and cover options differ for white collar, blue collar and professional collar workers. Workers in the mining industry can be classified as:
|Job type||Classification||Impact on insurance|
|Clerical or executive manager||White collar||White collar workers face no exposure to any occupational hazards and typically work in offices. Premiums are lower.|
|Explosives handler (surface and underground)||Not insurable||The most dangerous jobs are uninsurable. You may require a different form of specialised insurance or a policy from your employer.|
|Surface or underground miner (no explosives)||Special risk||Hazardous work with a higher risk. You'll have to pay extra on your premiums, which is called a premium loading.|
|Surface workers||Rated for the usual occupation||If you work in the mining industry but you work as an electrician, for example, your insurer will classify you as an electrician.|
When you apply for an insurance policy make sure you specify the exact nature of your work as accurately as possible. This will help you get the right cover and avoid losing out due to exclusions or failure to fully disclose information.
Some miners work underground while others work above ground in open-pit or strip mines. Underground miners are at risk from cave-ins or collapses and generally face greater dangers. Above-ground miners face risks of their own. Machinery injuries are common and above-ground miners are exposed to waste material and environmental hazards.
How much should a miner pay for income protection insurance?
Miners may have to pay a bit more than average to get income protection cover. But it all depends on the nature of your work and how much you earn. Figures from Payscale.com suggest the average incomes for various mining jobs:
|Heavy equipment operator||$140,000|
To give you a clearer idea of income protection insurance costs, here are some example quotes taken from finder's comparison engine. Your own results will obviously differ depending on your income, location, age and job type.
*These quotes are examples only and are based on a non-smoking 35-year-old male coal miner from NSW. Your actual quotes may differ from those shown. These quotes are accurate as of June 2017.
How can I find the right income protection policy for me?
When you're shopping around for income protection insurance you need to have a clear idea of your individual circumstances and insurance needs. Here's what you need to look for:
- Definitions. If you're looking at income protection insurance make sure there is a clear definition of your occupation (and how you are covered).
- Stepped versus level premiums. Stepped premiums start out cheaper but increase over time. Level premiums stay flat (adjusted for inflation) but are higher. Learn more about the differences between the two.
- Benefit limits. Policies often have an upper limit for benefit payments. Always check a policy's limits, especially if you're a miner on a high income.
- Benefit period. Typically, income protection policies only pay benefits for a limited, defined period, usually between one and five years. Many policies don't pay out after the policyholder turns 65.
- Agreed value vs indemnity value cover. Agreed value cover policies let you set your monthly income, and thus the benefit amount. Indemnity value cover calculates your benefit amount based on your most recent income level. So if you have a fluctuating income, an agreed value cover might cost more but it lets you lock in a suitable benefit payment even if you're injured during a slow month.
I have workers' compensation: do I really need income protection insurance?
Australian companies are required to provide workers' compensation insurance to their employees, including miners. While worker's compensation can offer effective benefits if you are injured on the job, it is much more limited than income protection insurance.
The first problem is that workers' compensation is very different in each state, and it can be difficult to know what benefits you may be entitled to in the event of a claim.
- Depending on which state you are working in at the time of an accident, where you are living and what your employer’s workers' compensation arrangement are, you may be eligible for different benefits at different times.
- Some states offer lower benefits, have stricter injury, illness or disability requirements and shorter benefit periods than others.
- Depending on your location, employer and occupation, your workers' compensation might be managed by the state government, a private insurer or your employer.
Learn more about income protection and workers' compensation.
Extra benefits of income protection insurance
Here are some more reasons to consider income protection even if you have workers' compensation:
- Unlike workers' compensation, income protection pays benefits for injury, illness, disability and death even if it occurred outside the workplace, or for reasons unrelated to your job. To get workers' compensation you have to prove that the incident was a direct result of your employment.
- Benefits paid are typically larger, particularly in relatively high-earning areas of the mining industry. Each state has its own maximum limits for workers' compensation benefits and these might simply be too low. For example, NSW limits workers' compensation benefits to a maximum of $2,100 per week, which might not be enough for a family to live on.
- You also need to consider the increased costs associated with an illness or injury that may not be covered under your workers' compensation policy, such as transportation, over-the-counter medications and caretakers. Once you factor these in it might become more apparent that you can benefit from additional coverage.