Exploring Term Insurance And Documents Required For Its Purchase
Updated On Sep 07, 2021
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Many term plans also offer the advantage of adding a spouse into the plan. Where spouses together are policyholders, such policies are known as joint term plans. Most insurers offer policyholders the option of jointly getting a term plan with their spouses.
The plan offers a host of other benefits that could prove advantageous to both spouses, including multiple options for payment of premium along with multiple options to receive benefits. This means that the nominees of the policyholders can receive the sum assured either as a lump sum amount or as a monthly income or even take half as a lump sum amount and half as a monthly income. Additionally, they can also choose whether they wish to receive the sum assured as a fixed amount over the months or as an increasing income amount.
Documents Required To Buy Term Insurance
It is almost impossible to always anticipate the financial emergencies that might arise in our lives. That is why one of the most essential pieces of financial advice that can benefit all individuals:
1. Proof Of Identity
First and foremost, buying a term insurance plan would require an official photo identity proof from your end. This could be in the form of common identity proofs such as an Aadhaar card, passport, PAN card, driving licence or Voter ID card. In certain cases, it could also be an official letter from a public servant or authority with an attached photograph.
2. Age Proof
Most term insurance providers also ask for a document that serves as age proof to ensure that you meet their eligible age range. These documents can be any of the identity proofs mentioned above since they also include your date and year of birth. Apart from these, you could also consider submitting documents such as a birth certificate, school or college leaving certificate or marriage certificate.
3. Proof of Address
The next document required to buy a term insurance plan is official proof of your permanent address. This could be presented in the form of a passport, PAN card and other documents for identity mentioned above. It could also be a ration card, bank statement as well as an electricity or telephone bill.
4. Income Proof
Term insurance policies are granted on the assurance that the policyholder will be able to pay the premiums required for the entire tenure of his or her policy. To ensure the same, term insurance providers ask policyholders for certified documents of their source and type of income. Income proofs also play a huge part in determining the amount of the sum assured for your term insurance plan. Most term insurance providers are known to grant coverage that can go as much as 20 times the amount of your annual income.
5. Medical Reports
Your term insurance premiums and overall sum assured are dependent heavily on your current medical health as well any medical risks you might face in the future. That is why your past medical records and the latest medical reports make up an important part of your term insurance documentation.
As with all official applications, you are also expected to submit a specific number of your latest passport size photographs for verification.
With these proofs and documents in place, any individual can easily avail of the many significant benefits of term insurance. You can also save a considerable amount of money every financial year by making the most of term insurance tax benefits as they apply to your specific policy. It is recommended to avail of a term insurance plan that has the backing of a reliable financial institution, provides various benefits and offers you immense flexibility with payments.
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.