Term Insurance Eligibility

If you are worried about the financial security of your loved ones, especially when you are not around to protect them anymore, buy a term insurance plan and get rid of your worries. An online term plan provides financial security to a policyholder’s dependents in the event of his death during the policy term. 
 

Like any other insurance plan, a term insurance plan also has a set of eligibility criteria an applicant must meet. However, people are often confused about term insurance plan eligibility and documentation. Such confusion can lead to a rejection when you apply for a term insurance plan. 
 

Read on to get detailed information about the eligibility for term insurance. 

What is term plan?

Let us first briefly understand what a term insurance plan is. A term insurance plan is an uncomplicated and useful life insurance plan that provides a predetermined payout to the policyholder’s nominee if the policyholder dies while the policy is active. It is a beneficial life insurance plan with a large sum assured at a low premium cost. 
 

However, a regular term insurance plan does not offer maturity benefits. Policyholders will have to opt for a term plan with return of premium for maturity payouts.

Who is eligible to purchase a term plan?

Before applying for a term insurance plan, it is advisable to check the term insurance eligibility criteria. The eligibility criteria may vary between different insurance providers and for different plans. However, the general basic parameters remain the same for all term plans. These parameters are:
 

• Citizenship:

  Indian citizens can buy a term insurance plan in India in their name. However, NRIs or PIOs can also leverage the benefits of a term insurance plan in India.

• Age:

  A person between ages 18 and 65 is eligible to apply for a term life insurance plan. The policyholder’s age is a key determinant of the term insurance plan’s premium. 

• Health condition:

  Since a term insurance plan insures the policyholder’s life, most insurance providers require a policyholder to undergo a health examination to determine the current health condition and the inherent risks for the insurer. Be completely honest about your health condition and medical history to avoid issues during claim settlement. 

• Income:

  A term insurance plan has no specified minimum income requirement. However, the insurance company would ask you for your bank statement copies and salary slips to determine the coverage on your term plan. Moreover, your income helps the insurer understand your comfort in paying the policy premiums regularly.

• Smoking habits:

  If you smoke or have been a smoker in the past, you must disclose this information to the insurer. It is because smokers are exposed to severe health hazards like lung cancer.

Required Identity Proofs and Residence Proofs

Before you apply for a term insurance policy, there are specific documents required by the insurer to verify your age, address, income, and health. Below is a list of documents you may need.
 

Identity Proofs

For identity verification to protect yourself against fraud, you must provide official photo ID proofs. The purpose of these documents is to confirm that the policy is being issued to the correct individual.

• Aadhaar card
• PAN card
• Passport
• Voter ID card 
   

Residence Proofs

Address proof is also required to validate your permanent residence and ensure accurate policy documentation. The insurer uses these documents to confirm your current living address.

• Aadhaar card
• Passport
• Utility bills (electricity, water, gas)
• Ration card

Who Should Buy Term Insurance?

Term insurance plans are simple policies designed to meet the insurance needs of a more extensive section of people. People in varying life stages can invest in a term life insurance plan based on their investing needs. The following categories of people can invest in a term plan:
 

• Young professionals:

  If you are starting your professional journey, a term insurance plan is a great investment option. These plans offer tax* relief under the Income Tax Act in the form of exclusions on premium payments and maturity benefits. 

• Newlyweds:

  Your financial responsibility increases when you have a life partner. An individual or group term insurance plan can provide your dependent partner with a financial safety net in distressing times. 

• Parents:

  If you are planning to start a family soon or already have children, you need to ensure their financial security for major life events, such as their college education, marriage, and skill training. A term plan safeguards your child’s financial future and protects them in your or your partner’s absence. 

• Retired citizens:

  A term plan is equally beneficial for people nearing retirement. The sum assured from a term plan can help your partner live a respectable and independent life in their golden years.

• Individuals with dependants:

  Buying a term plan can be a suitable option for people who have children, spouse, or dependent parents. In case of an unforeseen event, your family will be financially protected, as the term plan will cover the living expenses, debts, and future financial goals.

• Sole earner of the family:

  If you are the primary or only income earner, your family may face financial hardships in your absence. A term insurance policy makes sure that your loved ones remain financially stable because of the death benefit provided.

• Individuals with outstanding liabilities:

  In the event that you pass away, your family may be burdened by whatever debts you may have, such as mortgages or loans. Your loved ones won't have to worry about money thanks to a term insurance policy that helps pay off these obligations.

• Self-employed:

  There are many unpredictable income flows faced by self-employed people. By having a term insurance plan, they can financially protect their family and their business during uncertain times.

• Those looking for a smooth life:

  The best part about term insurance plans is that they offer simple and affordable protection without complexities. So, it’s suitable for people who want peace of mind and financial security at a reasonable premium.

Why should you get a term insurance plan?

A term insurance plan safeguards your family financially in case of life’s uncertainties. Below are some valid reasons to get a term insurance plan.
 

• Financial protection for loved ones

  The basic purpose of term insurance is to make sure your family remains financially secure even in your absence. The plan covers the living expenses, debts, and future goals through the death benefit. 

• Affordable coverage

  As a term insurance offers high coverage amounts at low premiums, it's a reliable and cost-effective way to safeguard your family’s future.

• Flexibility to choose coverage amount and duration

  With term insurance, you get the flexibility to customise the policy by selecting a preferred sum that you want to get assured and a policy term based on your income, age, and financial goals.

• Peace of mind

  When you know that your loved ones will be financially protected, it not only gives you peace of mind but also a sense of long-term security.

• Easy to understand

  Term plans are easy and transparent, with no complex investment components. This makes them accessible for anyone to understand and manage.

Documents Required for Term Insurance

Proper documentation is an essential part of meeting an insurance provider’s term insurance eligibility criteria. Therefore, ensure you have the following list of documents ready before applying for a term insurance plan: 
 

• Identity proof:

  You must furnish an official photo ID proof to the insurer to safeguard against fraud and identity theft. Aadhar card, PAN card, passport, and Voter ID card are some acceptable photo ID proofs.

• Age proof:

  Since there is a lower and upper age cap on a term plan, you need to provide age proof to the insurer. Birth certificates, marriage certificates, and school or college pass certificates can serve as proof of age. 

• Address proof:

  Evidence and authentication of a policyholder’s permanent address can be done through his Aadhar card, passport, utility bill, ration card, etc. 

• Income verification:

  An insurance provider will prefer to offer you a term life insurance policy if you have a satisfactory and stable source of income which can support the policy premium payments. 

• Medical reports:

  You must submit your past medical reports and undergo medical tests as specified by the insurer. 

• Photographs:

  Recent passport-size photographs for verification.
   

Our Tata AIA policy for term life insurance is a customer-centric life insurance plan that gives you the freedom to select the premium payment mode and frequency. Our term insurance plans offer a high coverage to secure your family financially even when you are not around. 
 

Check out our various term insurance plans and use our term plan calculator to calculate the premium for the insurance coverage of your choice.

Conclusion

A term insurance policy is a smart and easy way of ensuring that your loved ones are not burdened by the loss of your presence. It is also comprehensive and comes at a reasonable premium, which gives you and your family peace of mind. You can easily cover your family's future by meeting the eligibility conditions, presenting the right documents, and making the correct choice of coverage. A term plan is an investment that is taken today to have a stable and secure financial future.