Eligibility Criteria For A Term Life Insurance

Eligibility Criteria for Buying a Term Life Insurance Policy

The eligibility criteria are generally health-based, not education-based. Get a quote and see how affordable securing your loved ones' future can be.

Written by : Rishabh Jain

Reviewed by : Gaurav Nagpal

Gaurav Nagpal

2023-05-16

1128 Views

7 minutes read

Locate branch
Resume journey
Pay Premium
Contact us

Term life insurance is a policy that provides financial protection to your loved ones. The policy will pay a benefit to the nominees if you pass away during the policy term. You should buy a term plan as early in life as possible, due to low premiums. The more you age, the more you become susceptible to diseases, and it impacts your premium.

To buy a term insurance policy, you must know the eligibility and the documents you will need during the process.

Let us know more about it in detail.

Table Of Content:

Who Should Buy a Term Life Insurance Policy? 
 

  1. Young People in the '30s: Term life insurance policies significantly benefit individuals who have just started working and don't have much financial burden. If you buy a term plan at an early age, you can begin securing your financial future.

  2. Newlywed Couples: Individuals who have recently got married may also buy term life insurance to secure their family. The couples can further opt for a joint life insurance policy to assure that the surviving spouse is secured if any unfortunate mishap happens to one of them.

  3. Parents: Individuals who have kids or people who intend to become parents in the future can also buy a term insurance policy, especially when they are the only breadwinner of the family. This term life insurance plan will assure that, in case of your ill-fated demise, the expenses of your children are fulfilled properly.

  4. Senior Citizens: There is a common myth that taking term life insurance at an old age is not worth it. However, if you want to support your children in fulfilling their dreams after retirement, then you must go for a term life insurance policy. A term life insurance can act as a retirement plan and will always ensure that all your needs are met and the goals of your children are also fulfilled.

Term life insurance policies help you stay secure and ensure the financial security of your loved ones. A person paying the premiums can claim tax deductions of ₹1.5 lakhs under section 80C of the Income Tax Act. Further, if the annual premium is less than 10 per cent of the sum assured, the benefit conferred to the nominee will be exempted under Section 10(10D).

Buying a term insurance policy is essential for a financially secure and stress-free life. They are one of the most suitable financial instruments you can opt for at any age to protect and safeguard your family.

Who is Eligible to Buy a Term Insurance Policy?

Before buying a term insurance policy, you must evaluate your eligibility. Different insurance companies offer different plans, and the eligibility criteria of the plans may also vary. 
 
Listed below are a few general criteria that may be a standard requirement of most insurance companies:

  1. Age: To be eligible to buy a term insurance plan, you must be at least 18 years old. The maximum age depends on the policy and the life insurance company.

  2. Citizenship: The person buying a term insurance policy should be a citizen of India. However, PIOs and NRIs can also buy a term plan.

  3. Medical Tests: It is mandatory to undergo a medical test in most cases while buying term insurance. A medical test helps the insurance company to assess any health risks that may impact the policyholder. It is considered to decide the premium of the plan.

  4. Lifestyle Habits: The term insurance premium for the person who smokes will always be higher than for non-smokers because they are more prone to significant health perils and, hence, require more risk coverage.

  5. Minimum Educational Qualification for Term Insurance: Surprisingly, there's no minimum education requirement mandated by law for purchasing term life insurance in India. The focus for insurers is on your insurability, which is determined by factors like health, age, lifestyle habits, and income.

Documents Required to Buy a Term Insurance Policy

Submitting necessary documents is an essential part of buying term insurance. Listed below are a standard set of documents that you may be asked for by the insurance company:
 

DocumentsType of Proof
PassportIdentity and Address Proof
Voter’s Identity CardIdentity and Address Proof
Driving LicenseIdentity and Address Proof
Aadhaar CardIdentity and Address Proof
Latest Income Tax ReturnsFinancial/Income Proof

The insurance company may need additional documents while processing your term plan application.

Did You Know?

Term life insurance is often the most affordable type of life insurance This is because it only pays out a benefit if you die during the policy term and doesn't include 

Claim Settlement Ratio

Wrapping Up

Term life insurance is a valuable financial tool that provides peace of mind by ensuring your loved ones are financially secure in the unfortunate event of your passing.  It's affordable, especially when you purchase a plan at a young age, and offers significant benefits.

Here are the key takeaways to consider when evaluating your term life insurance needs:

  • Who needs it: Anyone with dependents or financial obligations should strongly consider term life insurance. This includes young professionals, couples (especially newlyweds), parents, and even some senior citizens.

  • Eligibility criteria: Generally, you must be between 18 and 65 years old to qualify (although some plans may vary). There is no minimum education requirement, but insurers will consider your health, lifestyle habits, and income to determine your eligibility and premium amount.

  • Benefits: Term life insurance offers a death benefit payout to your designated beneficiary if you pass away during the policy term. This can help cover expenses, pay off debt, or ensure your family's financial future.

Remember, getting a term life insurance quote is easy and free. Don't hesitate to compare plans from different insurers to find the best coverage at an affordable price. By securing a term life insurance policy, you can protect your loved ones no matter what life throws their way.

Glossary

  • Nominee: The person designated to receive the death benefit payout from the life insurance policy.

  • Death Benefit: The financial amount paid by the insurance company to the beneficiary upon the death of the policyholder during the policy term.

  • Eligibility Criteria: The requirements that must be met by an individual to qualify for a term life insurance policy. These criteria may include age, health, lifestyle habits, and income.

  • Medical Test: The insurer may require a medical examination to assess the applicant's health and determine their risk profile. This can influence the premium amount.

glossary-img
Uncertain About Insurance
AdBanner-desktop

Recent Blogs

Why Is Medical Test Important In Term Insurance?
02 Aug '24
875 Views
Medical tests are a crucial component of your term insurance buying journey. Read to know more about the importance of these medical tests for term insurance.
Read More
Term Insurance
Why Is It Important To Check Your Term Insurance Premium?
02 Aug '24
876 Views
It is important to understand your premium, as this amount defines the coverage and benefits you will enjoy during or after your policy term.
Read More
Term Insurance
Why Online & Offline Term Plans Differ on Premiums?
02 Aug '24
881 Views
Online term plans are cheaper vis-a-vis offline plans because of the economics of business involved. It is also hassle-free and convenient.
Read More
Term Insurance

FAQs Related to Term Insurance Eligibility

A person must be at least 18 years to buy a term insurance policy in India.

Yes. You need to pay the premiums to the insurance company, and the company will provide you coverage in return. So, when you buy a term insurance plan, your income will be assessed to know whether you can pay for the insurance policy.

Read more.

The minimum education qualification required to buy a term life insurance plan is graduation. However, this may vary from insurer to insurer.

Insurers assess risk. They check eligibility (health, age, lifestyle) to see how likely you are to claim, which helps them set your premium.

There's no minimum salary rule in India, but insurers may consider income to ensure you can afford premiums.

It's rare, but people in extremely high-risk occupations (military, mining) might be excluded by some insurers.

Yes! Self-employed, homemakers or anyone with income can apply. Proof of income may be needed.

You pay premiums for a set term (e.g., 20 years). If you die during the term, your beneficiary gets a payout. It doesn't provide maturity benefits like whole life insurance.