Term Insurance Eligibility

What is Term Insurance?

Term insurance is a type of life insurance policy that provides coverage for a specific period, or “term.” If the life assured passes away during the policy term, the insurer pays the sum assured to the nominee. It's a pure risk cover plan with no maturity benefit if the assured survives the policy term. Now that we have understood what is term insurance, let us take a look at the eligibility of term insurance.

Term Insurance Eligibility Criteria 

This type of life insurance plan is suitable for individuals who want to secure the financial future of their family members in case of any unfortunate events. To avail of this coverage, individuals need to meet certain eligibility criteria set by insurance providers. These term insurance eligibility criteria ensure that you buy the plan most suitable to your needs and typically revolve around factors such as age, income, health, and lifestyle choices.

• Age Criteria: Age plays a significant role in determining term insurance eligibility. Most insurance companies have a minimum and maximum age requirement for policyholders. Generally, individuals in the age range of 18 to 65 years are eligible to apply. The specific term insurance age limit may vary among insurers and might be subject to change based on the prevailing market conditions and the company's underwriting policies.

• Citizenship: The citizenship of the customer affects the eligibility of term insurance, as many Indian insurers do not offer plans to individuals from a different country. Therefore, it is suggested that, you always check your term insurance eligibility before buying term insurance from India.

• Income Criteria: Insurers often consider an individual's income as an indicator of their financial responsibility and ability to pay premiums. While there isn't a fixed income threshold, policyholders are typically required to have a stable source of income to ensure they can meet premium obligations. The sum assured, which is the amount paid to beneficiaries in case of the policyholder's demise, is often linked to the policyholder's income, and therefore, becomes a key determining factor for term insurance eligibility. 

• Health Status: Health plays a crucial role in term insurance eligibility. Applicants are usually required to disclose their medical history, existing health conditions, and lifestyle habits (such as smoking or alcohol consumption). Some insurers might require a medical examination or request medical records to assess the applicant's health accurately. While pre-existing health conditions might not necessarily dictate who are eligible for term insurance, they could influence premium rates.

• Lifestyle Habits: Lifestyle choices can impact term insurance eligibility and premium rates. Risky behaviors such as smoking or engaging in hazardous activities might lead to higher premiums or even a denial of coverage. Insurance companies assess these factors to determine the level of risk they are taking by providing coverage.

• Occupation Type: Some insurers do not offer term plans to individuals within certain occupations, like people who are in the army, work at mines or other such high risk jobs. Thus, it is essential to check your eligibility of term insurance before buying the most suitable plan.

• Policy Term and Sum Assured: The chosen policy term and sum assured also play a role in eligibility. Insurers might have specific limits on the minimum and maximum sum assured based on the applicant's age, income, and other factors. Additionally, the policy term chosen should fall within the age limits specified by the insurer.

• Medical Examination: In some cases, insurance companies might require applicants to undergo a medical examination, especially for higher coverage amounts. The examination helps insurers assess the applicant's health condition accurately and determine the associated risk. This becomes a factor for eligibility of term insurance while buying the plan.

It's important to note that each insurance company may have slightly different eligibility criteria based on their underwriting guidelines. Let’s see the basic term insurance eligibility criteria in the table below:

* You can also check your eligibility of term insurance using a term insurance calculator online.

Who is Eligible to Buy Term Insurance Plans? 

As mentioned above, the term insurance eligibility criteria are quite comprehensive because these plans are specifically considered to be manageable and meet the insurance requirements of a wide number of people and loved ones. The following people are eligible to buy the best term insurance plan in India

1. Young Individuals/Professionals 

   Term insurance plans help individuals who are going to join the workforce and do not have any liabilities. They offer benefits on tax and can provide an early start to planning and securing your after-retirement years. 

2. Newly Married 

   Individuals who have just got married can also get term insurance benefits by buying the plan. They can avail of joint term insurance plans or individual plans to make sure that in their untimely demise, the future requirements of their partner will be looked after. 

3. Parents 

   People having children or planning a family in the future must consider buying a term insurance policy, especially if they are mainly the breadwinners of the family. A term insurance plan will make sure that during any unfortunate event, the educational/informative and other requirements of your children will be protected and secured. 

4. Senior Citizen 

   Many people choose to work after getting retired and also contribute to the household salary. A term insurance for senior citizen might help you in replacing a salary in the absence of a breadwinner. Some want to support their children even after their retirement or might have some not-paid liabilities. So, this plan ensures your child’s life objectives and also takes care of your liabilities.

5. NRIs

   NRIs, Person of Indian Origin (PIO) and Overseas Citizenship of India (OCI) card holders can buy term plan online without hassle, after checking their eligibility of term insurance in India. The best way to check your eligibility is through a term insurance eligibility calculator online.

6. People with Loans and Liabilities

   People who have remaining loans and debts can buy term insurance for home loan to ensure their family is not burdened with having to pay off the remaining amount. With the death benefit payout, the family can easily take care of the outstanding amount and live a debt-free life.

Documents Required to Prove Eligibility of Term Insurance

To check term insurance eligibility, insurers usually ask for the following documents:

• Age Proof: Aadhaar card, PAN card, passport, birth certificate

• ID Proof: Aadhaar card, voter ID, passport, driving license

• Income Proof: Salary slips, income tax returns (ITR), bank statements

• Address Proof: Utility bills, Aadhaar, rental agreement, passport

• Medical Reports (if required)

Term Insurance Eligibility for NRIs

Many insurers offer term insurance for NRI from India, with similar eligibility for term insurance. However, additional documentation like foreign address proof and overseas income proof may be required. Term plans for NRIs are often available online and usually offer tele/video medicals for convenient purchase of term insurance, depending on the insurer. 

Why Should You Buy Term Life Insurance Plans?

You should buy term plan because of the following reasons:

• Financial Security: The main reason for buying term insurance plans is to ensure the financial security of your loved ones in the event of your untimely death. These plans are even more important, especially if you are the main breadwinner of the family. Therefore, you should always check your term insurance eligibility and buy the most suitable plan for your family’s financial safety.

• Affordable Premiums: The term insurance premium rates are highly affordable compared to all the other types of life insurance plans. Therefore, with a term plan, you can secure a large life cover at budget-friendly premiums. You can buy the best term insurance for 1 Crore at premiums starting at just Rs. 473 per month.

• Suitable Life Cover: Life cover for term insurance starts from 50 Lacs and can go up as per your individual eligibility for term insurance. You can use a human life value calculator or a term insurance eligibility calculator to get an estimate of the maximum sum assured you are eligible to buy. 

• Flexible Policy Term: You can select the required policy term with term insurance, as most term plans offer cover from 5 years to 40 years. You can also opt for a whole life cover that covers you till 99/100 years of age. Therefore, you should always check your term insurance eligibility to ensure you get the right cover for a suitable tenure.

• Peace of Mind: With term insurance, you get the peace of mind that your family will be financially protected in the event of your unfortunate demise. This can help you live a stress-free life and live peacefully. Before buying a suitable term plan, you should always check your eligibility online using a term insurance eligibly calculator.

Wrapping It Up!

Understanding term insurance eligibility is the first step toward buying the right policy. Whether you're a young professional, an NRI, a homemaker, or a small business owner, there’s likely a term insurance plan that fits your profile. Make sure you meet the basic eligibility conditions, keep your records in order, and always disclose accurate information.

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