Recent years have defined the value of securing your life. Undoubtedly, an online term insurance plan is the best option to get financial security along with term insurance tax* benefits.
However, just like buying any financial instrument, you need to submit some documents to apply for the best term policy you want. One essential document you require to get a term insurance plan is valid income proof.
Read further to know about the documents you need to buy a term insurance plan in India and if you can buy term insurance without income proof.
What is Term Insurance
A term life insurance plan is a life insurance policy that provides protection for a fixed length of time. It is a basic life insurance plan that provides a sum assured to the deceased policyholder’s family during the policy term.
For example, if the policyholder passes away during the policy duration, the plan provides financial security to his dependents. An essential term insurance plan has a low premium and relatively high coverage. A pure term insurance plan does not offer maturity benefits. Instead, it is a straightforward plan that provides high life coverage for a low premium.
Can You Buy a Term Insurance Policy Without Income Proof?
You need valid income proof to buy a term insurance plan. It is only possible to purchase a term plan by providing income proof. Here are the reasons why you need to provide income proof to the insurer.
An income proof helps the insurance company determine the applicant’s eligibility for the term plan.
Moreover, it helps determine the coverage that can be offered to the applicant.
When a customer gives his income proof, the insurer uses it to determine the customer’s financial worth.
It also shows if the customer has the capacity to pay the policy premiums given his present income level.
An individual’s income level also helps in determining how much coverage his dependents will need to meet their financial requirements in case of his death.
Submitting your income proof also helps you ensure you are not over or underinsured. If you are over-insured, you will have to pay unnecessarily high premiums to the insurer. On the other hand, if you are underinsured, your family will not have enough money from the term plan to meet their financial needs in your absence. Therefore, your income proof helps you get the appropriate sum assured with your term insurance plan.
Insurance companies have more confidence in applicants having a steady income source with sufficient current income. By submitting valid income proofs, you can assure the insurer of your stable financial condition and ability to pay policy premiums on time.
Determining your eligibility for a term insurance policy helps you get the policy for a lower premium.
Documents That Can Be Used As Valid Income Proof for Term Insurance Plan India
You can use the following documents as valid income proof to get a term insurance plan:
Last 3 months’ salary slip.
Income Tax Return Statements for the last 3 years
Recent Form 16
Bank statements showing income or salary for the last 6 months
Recent salary certificate from the employer
CA certificate not more than 2 months old
Form 26 AS from last year
Agricultural income certificate from last 1 year
Mandi receipts from the last 2 months
Current land records and income assessments
Other Documents Required to Get a Term Insurance Plan
Although valid income proof is essential to get a term plan in India, you need other documents too. Here is a list of the other documents you need to submit to the insurance provider, along with income proof to get your term plan application approved:
Identity proof: A valid photo identity proof is another mandatory document you must provide to the insurance company to get a term insurance policy. The Aadhar card, PAN card, Voter ID card, passport, driving licence, etc., are some photo documents you can submit as identity proof. In a few instances, the applicant may have to get an official attestation from a government official with an attached signature and photograph.
Age proof: Your age is a crucial determinant of the term life insurance policy’s premium. It also helps the insurance company decide if it can provide you with a term plan. Therefore, the insurance provider may ask you for age proof to ensure you are within an appropriate range for them to offer you a term plan. An identity document, such as an Aadhar Card, has the individual’s date and year of birth. Usually, it serves as your age proof also. Other documents that serve as age proof are birth, high school, college graduation, and marriage certificate.
Address proof: An address proof validates your permanent address. Several identification documents, such as an Aadhar card, passport, PAN card, etc., have your permanent address on them. All these documents can be used as proof of address. Apart from these, you can submit other documents, such as ration cards, utility bills, or bank statements, as proof of address.
Medical reports: Your current health condition and the exposure to health risks in the near future also help determine the term insurance policy premium. It is why most insurance companies ask for the term insurance applicant’s past and recent medical records.
Recent photographs: You will be asked to submit recent passport-size photographs along with other documents to complete the paperwork for the term plan.
You need to submit several documents to the insurance company to get a term life insurance plan. Among these, valid income proof is an essential document the insurer requires. An income proof is an assurance of your stable and sufficient income and helps you get a term plan with sufficient coverage for a low premium.
Tata AIA life insurance offers an extensive range of term life insurance plans. Our term plans offer the insured person comprehensive coverage in the event of hospitalisation, critical illness, accidental disability, heart conditions, cancer, and death. Moreover, you can benefit from the quick 4-hour claim settlement process with us.