Insurance companies often request verification of income. Though the inquiry is not as rigorous as that of a bank underwriting a mortgage, the information required is similar. The process of writing a letter to prove your income will mostly involve gathering and citing the proper documentation. In general, the company will use this information to verify that your insurance application is truthful, and to determine that the insurance coverage you are applying for is appropriate for your level of income.

Documentation From Your Employer

Ask your employer to provide you with a letter verifying your employment and current income. If you have been employed for some time, also ask your employer to verify your length of employment. Anything that shows your stability and standing in the community, even if not specifically required, helps the underwriter make a positive determination. Consider asking your employer to send one copy directly to the insurance copy and a second copy to you. This way you know exactly what is in the letter to the insurance company, and the underwriter knows the information from your employer is firsthand and unaltered.

Other Documentation

Make copies of recent W-2 forms and one or more recent pay stubs. In addition, gather documentation of income from trusts, annuities, settlements, social security or any other source. If you are self-employed, think creatively about what you can do to verify the circumstances of self-employment and income. In many instances, you will have 1099s from persons and companies you have worked with. Copy these and any records you may have of recent client contracts -- blacking out client names that you want kept confidential. Even when you cannot provide complete income verification, anything that establishes your general standing in your professional community helps. For instance, consider including one or two documents of promotional materials for your consultancy or business.

IRS Form 4506-T

Consider the need for IRS Form 4506-T. When you are self-employed, often it is difficult to provide sufficient income documentation. A transcript of your Federal income tax return may be needed. From the IRS website, download IRS Form 4506-T, "Request for Transcript of Tax Return." Fill out the form, including the name, address and telephone number of the insurance company. After filling it out, make a copy and send the original to the IRS. The IRS will send a transcript of your income tax return directly to the insurance company.

Writing the Letter

Write a letter to the insurance company briefly explaining the purpose for writing and describing each document that you have come up with as it relates to your income. Include a complete listing of all the documents and note whether they are attached or enclosed with the letter. Even though the insurance company will receive copies directly, include copies of your employer's income verification letter and IRS Form 4506-T.


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