Can You Purchase Term Insurance Without Income Proof?

What is the Valid Income Proof Required For Term Insurance Purchase in India?

Most insurers in India offer term plans if the customer has any of the following income proof documents:

• Last 3 months’ salary slips

• Last 3 year’s Income Tax Returns

• Bank statements showing 6 months’ salary income

• Recent Form 16

• CA certificate

• Computation of Income

Is Income Proof Mandatory for Term Insurance? 

No, now income proof is not mandatory for buying a term plan. Various insurance companies are offering term life insurance plans, which you can purchase without income proof. This encourages more individuals to secure their loved ones in the unfortunate event of their demise during the policy term. There are term insurance plans that offer financial protection to your nominees in your absence, return your premiums on maturity, and provide the chance to save on your yearly taxes. 

Best Term Insurance Without Income Proof to Buy in India

Here is a list of term plan without income proof that you can buy in India that also provide the option of returning your premiums paid at the maturity of the policy.

* You can calculate the premiums you would need to pay using the term insurance premium calculator for the desired sum assured for the entire policy term.

* Out of the above-mentioned plans, Tata AIA InstaProtect does not return the premiums on maturity.

Documents Required to Buy Term Plan Without Income Proof in India

Here is the list of documents required for term insurance without income proof that you need to submit while buying plans in India:

• Valid government ID Proof: Standard identity documents such as an Aadhaar card, passport, PAN card, driver's license, or Voter ID card are valid as proof of identity. In some instances, it may also constitute an official attestation from a government agency or official with a photo and signature attached.

• Valid Address Proof: An address proof will serve as official evidence of your permanent address. You can present it as a passport, PAN card, or any other document for the identification mentioned above. Other address proof documents can be a ration card, a bank statement, telephone, or electricity bills.

Documents Apart from Income Proof Accepted as Valid Income Source

Apart from the income proof required for term insurance, you need to submit the following documents:

• Financial Surrogates: Financial surrogates are the alternate income documents required that can be presented as income proof required for term insurance. For example: Credit card statements, Car RC, Bike RC, and more. Whether these documents will be accepted as reliable documents to buy term plans or not differs for different insurers. Therefore, you can check with the insurer of your choice if the financial surrogates will be accepted or not.

Why is Income Proof Required for Term Insurance?

Here is a list of reasons why the insurers often request you to submit income proof to purchase life insurance plan in India:

• The income proofs will help the insurance company determine the amount assured or total life cover that could be provided to the person who is applying. They also help them decide the cost of the policy premiums.

• The insurance company evaluates your ability to pay your premiums on time. This is based on the documentation you submit to prove your income.

• It eliminates the risk of over-insurance if the life assured has purchased coverage greater than their human life value. 

• In the event of a mismatch on the tax declarations, the insurance cover may be canceled and an insurance claim can be rejected. The submission of income proof when buying the term insurance shields you from this.

Final Word

Purchasing term insurance without income proof is now possible as most insurers understand the restrictions some customers may face while buying term plans. However, these plans offer limited coverage options and may have some restrictions. Thus, it is better to go through the policy documents of each plan to get a better understanding of the policy’s T&Cs.

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