A term life insurance policy is a small but key inclusion in the financial portfolio of several people. It allows them to spend as little as possible to get adequate financial security for their loved ones that can kick in if something untoward were to happen. It is a simple and cost-effective way to build a reliable corpus for your family so they may take care of themselves as well as any liabilities that the life assured may leave behind.
When viewed from the lens of this purpose, the importance of term insurance is amplified for a wide range of people. However, buying a term insurance is subject to the eligibility criteria of these policies. What are the eligibility criteria for term insurance that all policyholders and beneficiaries need to know about? Let’s find out.
Eligibility Criteria for Term Insurance
The eligibility criteria for term insurance plans covers a broad range of parameters. The common ones of these include age, citizenship, fulfilling documentation requirements, and more. Let’s take a look at each of the term insurance eligibility criteria to understand how it may influence your eligibility for term insurance.
Age Criteria
The age of the applicant plays a significant role in determining their eligibility for term insurance.
Minimum Entry Age:
18 years
Maximum Entry Age:
65 years (varies by insurer)
Maximum Maturity Age:
approximately 75 years (varies by insurer)
Purchasing term insurance at a younger age often results in lower premiums, making it a strategic decision for long-term financial planning.
Income and Occupation
A steady income is typically required to qualify for term insurance, as it demonstrates the ability to pay premiums. Insurers may request income proof such as salary slips, bank statements, or tax returns.
While salaried individuals and self-employed professionals commonly meet this term insurance eligibility criteria, some insurers also offer policies to homemakers and individuals without regular income, provided other criteria are met. This may differ between insurers and policies.
Health and Medical Requirements
Health status is a critical factor in determining eligibility and premium rates for term insurance. Applicants may be required to undergo medical examinations to assess their health condition. Pre-existing conditions can influence the terms of the policy, including premium amounts and coverage limits.
Citizenship and Residency
Term insurance in India is available to:
Indian Citizens:
Residents of India
Non-Resident Indians (NRIs):
Indian citizens residing abroad
Persons of Indian Origin (PIOs) and Overseas Citizens of India (OCIs):
Individuals with Indian heritage
NRIs and PIOs can purchase term insurance in India, often benefiting from cost-effective premiums and simplified claim processes for beneficiaries residing in India.
Required Documentation
After the aforementioned eligibility criteria for term insurance is met, applicants typically need to provide the following documents to ensure consideration in the application process.
Identity Proof:
Aadhar card, PAN card, passport
Address Proof:
Utility bills, rental agreements
Income Proof:
Salary slips, bank statements, tax returns
Age Proof:
Birth certificate, school leaving certificate
Medical Reports:
If required by the insurer
Specialised Term Insurance Options
Term Insurance for NRIs
With benefits like tax exemptions under Section 10(10D) of the Income Tax Act on offer, and ease of claim settlement for families residing in India, term insurance for NRIs are plans designed especially for NRI needs. You may choose a plan to fit your needs so your family back home can feel a sense of security.
Term Insurance for Senior Citizens
While the maximum entry age for regular term plans is generally 65, some insurers offer term insurance for senior citizens, catering to individuals up to 69 years old. However, premiums may be higher, and coverage options may be limited.
Term Insurance for Family
Term insurance for family is an effective way to ensure financial security for almost all family members, even if one of the life assured were to face an unfortunate incident. Policies can be tailored to cover specific needs, such as children's education or spouse's financial stability.
₹50 Lakh Term Insurance
A term insurance policy with a sum assured of ₹50 lakh is suitable for individuals seeking substantial coverage at affordable premiums. A 50 Lakh Term Insurance Plan offers a balance of cost and protection. ₹50 lakh term insurance eligibility criteria remain consistent, focusing on age, income, and health status.
Term Plan with Return of Premium
In case of term insurance with return of premium option, the total premiums paid are offered as a maturity benefit if the policyholder survives the policy term. While premiums are higher compared to standard term plans, it offers a savings component along with life coverage.
Utilising Term Insurance Calculators
A term insurance calculator is a valuable tool that helps estimate the premium based on factors like age, income, desired coverage, and policy term. It aids in selecting a policy that aligns with your financial goals and budget.
Understanding who qualifies for term life insurance and why those criteria exist is essential to making an informed decision. Factors like age, income, health condition, and residency status help insurers assess risk and determine appropriate coverage. But from your perspective as a policyholder, these criteria also guide you toward selecting a plan that suits your life stage and financial responsibilities. Whether you're insuring yourself to protect your family, planning ahead as a senior, or securing coverage while living abroad, knowing the eligibility requirements helps ensure you’re adequately covered. Take the time to evaluate your needs and consult available tools to make a choice that balances affordability, coverage, and peace of mind.
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