Due to the pandemic, people are becoming aware of securing their lives. One of the best ways to do this is by taking a term insurance plan. However, many people have also lost their jobs while others have taken up temporary earning opportunities like contractual jobs or freelance work. In such a case they do not have a fixed earning source and no income proof. Can such people purchase a term insurance policy without income proof?
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You cannot buy a term life insurance policy without submitting valid income proof.
This is required so that the insurance company can decide the sum assured, the risk involved, and whether the person is capable to pay the premiums on time or not. Moreover, submission of income proof decreases the chances of policy lapse.
As stated above, you need to submit valid documents (including income proof) to purchase a term insurance plan in India. Note that the underwriting department of all insurance companies checks the authenticity of the income proof and can reject it if it finds any discrepancy.
Here is the list of documents you need to submit:
Moreover, it would be best if you keep the above-mentioned documents handy as they can enable you to capitalize on your term insurance tax benefits during the next tax window.
Apart from the income proof documents, you need to submit other important documents as listed below:
With these documents and proofs submitted properly, you can purchase term insurance without any hassles and enjoy the important benefits that come with it. Additionally, it is also possible to save a significant amount of money throughout the year by taking advantage of tax-free term insurance benefits that apply to the specific policy you have.
Paying timely premiums constitutes building the financial corpus. The insurance company can use this amount to offer risk cover to those policyholders who need it at the time of any uncertainty. If a person does not earn, he/she will not be able to pay premiums regularly which could lead to a lapse of the policy.
Mentioned below are some more reasons why the underwriting department of insurance companies examine these documents:
Purchase term insurance without income proof is not possible as the income of the person applying is among the main requirements by which the insurer decides whether or not to provide the insurance plan or not. Therefore, you should have evidence of your income before deciding whether you want to make an application for any term insurance or not.
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