Your income proof is one of the documents that the term insurance providers consider. It helps the insurer determine the optimum coverage necessary as your income replacement.
What are the Eligibility Criteria for Buying Term Insurance in India?
Term insurance plans are financial instruments that provide predefined death benefits to the policyholder’s family if there is an unfortunate demise of the life insured. In addition, as many term plans do not guarantee maturity benefits, they come at even more affordable rates.
The policy-providing company assesses various term insurance eligibility criteria before approving an application request which largely depends on the applicant's personal and medical history. In this guide, we will discuss vital clauses affecting term insurance processing in detail.
What Are the Term Insurance Eligibility Criteria in India?
Individuals often overlook the eligibility criteria for term insurance and proceed with the application procedure by visiting the official website of their preferred insurer.
But it is imperative to note that, like other insurance schemes, a bunch of general regulations have been mandated by all insurance companies. These define the line regarding who is eligible for their services.
You can purchase these schemes with life coverage if you meet the following guidelines:
- You must be an Indian citizen while purchasing the term plan from your preferred insurance-providing agency. However, those who presently live overseas for work or education purposes but are Indian by birth can continue availing the services.
- Most companies offering a term insurance plan need their consumers to undergo a complete medical check-up. It is a standard practice that helps insurers fix an initial premium by anticipating potential health risks of the life insured.
- People between 18 and 65 match the term life insurance eligibility criteria regarding the age limit. However, as responsibilities increase with age, they can later increase the number of riders to consolidate the beneficiaries' financial stability.
- Currently, the IRDAI has not fixed any minimum income cap for Indians who wish to purchase a comprehensive term insurance plan. However, insurers can ask you to produce the latest payslips or provide updated bank statements to anticipate whether they may trust you with timely premium payments.
What Are the Documents Needed for Purchasing a Term Plan?
A detailed list of necessary documents is published on the insurance company's official website. However, following are some commonly requested documents which term policy seekers must upload online, procure an attested hard copy, or submit via mail, depending on the mode of the underwriting process.
- ID proof (Aadhaar Card/ Voter ID/ Passport/ Driving License)
- Address proof (Any utility bill like electricity, water bill, etc.)
- Age proof (Aadhaar Card/ Birth Certificate)
- Income proof (Bank statements/ Payslips)
- Medical reports
Who Should Buy a Term Insurance?
As term plans offer numerous tax benefits under Section 80(D), young people who newly start working enjoy these perks by purchasing these policies. Also, securing life insurance at an early age greatly contributes to proper planning for post-retirement financial stability.
Newly Married Couple
A joint term life insurance is an ideal measure to ensure the financial well-being of one’s better half in case of an unfortunate demise of the life insured. Apart from joint term plans, companies also provide the option of availing individual term plans to married couples, provided they meet all the aforementioned eligibility criteria for term life insurance.
Education costs and other expenses related to a child's upbringing can be safeguarded with the help of individual or combined term plans. Life coverage is crucial, especially in families with only one primary earning member.
As medical advancements continue to soar, the life expectancy of the older population is gradually increasing, necessitating the inclusion of perks associated with a term plan. In addition, many self-employed individuals continue working lifelong. Hence, they can easily bear the premiums and seek to replace their income with a sound insurance policy. Thus, a term plan effectively reduces their financial stress from major upcoming financial events related to their dependents’ lives.
Term plans are ideal life insurance instruments for almost everyone as they come with very easy-to-meet eligibility criteria and cost-effective premiums. So whether you have recently stepped into a professional realm, intend to marry soon or are thinking about upgrading your existing plan, it is crucial to know the terms set by the insurer for processing a claim seamlessly.
FAQs about Term Insurance Eligibility Criteria
Yes, it is possible to secure a term insurance policy for your spouse both individually or as a joint plan. If you have all the requisite documents then proceed with the application process online to save associated brokerage costs.
Insurers set different credentials to mitigate the risks associated with timely payment of premiums. Also, the insurer needs to assess the health conditions of the applicant to weigh the chances of a possible claim.
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- This is an informative article provided on 'as is' basis for awareness purpose only and not intended as a professional advice. The content of the article is derived from various open sources across the Internet. Digit Life Insurance is not promoting or recommending any aspect in the article or its correctness. Please verify the information and your requirement before taking any decisions.
- All the figures reflected in the article are for illustrative purposes. The premium for Coverage that one buys depends on various factors including customer requirements, eligibility, age, demography, insurance provider, product, coverage amount, term and other factors
- Tax Benefits, if applicable depend on the Tax Regime opted by the individual and the applicable tax provision. Please consult your Tax consultant before making any decision.