Can I Purchase Term Insurance Without An Income Verification?
Updated On Jul 29, 2022
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Term plan is a type of life insurance policy that provides comprehensive financial protection for a limited period against the premium paid. It provides coverage against death. If the policyholder dies before the end of the policy period, the insurance company pays the death benefit (Equal to the sum assured) to the beneficiary. However, if the policyholder outlives the policy term, they don’t receive any survival benefit.
One of the important reasons why many people prefer buying a term plan over other life insurance policies is that it offers the highest coverage at an affordable premium. Apart from protection against death, some term insurance plans cover partial and permanent disability.
Benefits Of A Term Insurance Policy
Safety against liabilities and loan
A term insurance policy provides financial security to the dependent family members against loan and liabilities such as home loan or any other debts you may have.
Coverage against critical illness
Apart from offering protection against death, a term plan also covers critical illness. You can purchase a critical illness cover as an add-on to your term insurance and pay a little additional premium. The add-on helps you get a lump sum payment when you are diagnosed with any critical illness like cancer, heart attack, kidney failure (check the list of diseases covered under the policy in the policy documents).
Affordable premium
One of the most significant benefits of a term insurance policy is that the premium for such plans is the lowest among all other life insurance plans. Additionally, the sum assured offered under term plans is higher when compared to the premium amount.
Tax benefits
This is another important benefit of buying a term plan. The premium you pay for the policy is eligible for tax benefit to a maximum limit of Rs. 1.5 lakhs in a financial year under Section 80C of the Indian Income Tax Act. Also, in the event of a death claim, the pay-out received by the family member is exempt from tax under Section 10(10D).
Add-on protection
You can easily widen the coverage scope of your term plan and get additional benefit by purchasing add-on covers of your choice. Some of the most popular add-ons that people buy include, critical illness cover, accidental death rider, return of premium rider, waiver of premium, etc.
Documents Required For Buying A Term Insurance Policy
Just like any other insurance, when you buy a term plan, you must comply with the documentation process. Although the process may vary from insurer to insurer, generally most insurance companies require the policy buyers to submit following documents:
- Proof of identity (driving licence, passport, voter ID card, PAN card, Aadhaar card, ID issued by a government body)
- Proof of residence (recent utility bills, passport, ration card, bank account statement, letter from a recognised public authority, Aadhaar card, driving license)
- Medical reports
- Passport size photographs
- Income proof (salary slips, bank account statement reflecting salary credit, ITR/Form 16, business account statement, current account statement)
Is It Possible To Buy A Term Insurance Policy Without Providing Income Details?
A lot of people hold wrong information about the documentation for buying term insurance; they believe that income proof is not mandatory. However, the truth is you cannot buy term insurance without income proof.
It is necessary to submit proof of income as it is important for financial underwriting purposes. Knowing the extent of the policy buyer’s income, the insurance companies determine the maximum life cover they can offer corresponding to a certain premium amount.
Conclusion
So, while buying a term plan make sure that you comply with the documentation well, and keep the necessary papers handy beforehand to avoid last-minute hassles and delay in the application process.
Also read: What Is The Maximum Age To Buy Term Insurance In India?
