Is it Possible to Purchase Term Insurance without an Income Verification?
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Gone are the days when you would have to worry about the future of your family, especially when you wouldn’t be around. These days, there are so many options to secure the future of your family. And one of them is a term insurance policy. Whether you are in a profession that has a greater risk or you are the only earning member of your family, or you just want to secure the future of your family even if you pass away all of a sudden, a term insurance plan is certainly the best option for you.
The best thing about the term insurance plans is that it is quite affordable. You can choose to pay the premiums monthly, quarterly, half-yearly, or annually. You just have to ensure that the information you are providing is correct and you are duly filling out the form.
Documents needed to buy a term insurance plan
When you are purchasing a term life insurance policy, just like the other insurance policies, you need to complete the documentation process. Nevertheless, not all insurance companies ask for the same documents. Therefore, the type of documents may vary from one insurance company to the other. Here are some of the documents that are commonly asked by the insurance providers in India.
- Identity proof, which can be a driving license, passport, PAN card, ID issued by a government body, voter ID card, and Aadhaar card
- Residence proof, such as a letter from a recognized public authority, recent utility bills, bank account statement, passport, ration card, Aadhaar card, driving license
- Passport size photographs
- Medical reports
- Proof of income such as bank account statement reflecting salary credit, salary slips, business account statement, ITR/Form 16, current account statement
Can a term insurance policy be bought without income proof?
While you are planning to buy a term insurance without income proof , you might come across people who would tell you that you could buy a term life insurance plan without income verification. You need to know that this is completely wrong. The fact is that you need to provide income proof to purchase a term insurance policy since it is mandatory.
Why is it important to submit income proof?
When you pay the policy premiums regularly, it helps the insurance companies to provide risk cover to those policyholders who are in dire need of money, especially in a time of uncertainty. And if a policyholder does not have a regular income, it can lead to not paying premiums consistently, and this may ultimately cause a lapse of the policy.
Here are some of the reasons why the documents, especially the income proof are verified by the underwriting department of the insurance companies.
- The proof of income helps the insurance providers to determine the assured amount that can be offered to the individual who is buying the policy. This also helps in deciding the policy cost.
- Upon submitting the income proof documents, the insurance company finds out if you can pay off the premium without fail.
- If there is a mismatch of tax declarations, it can have an impact on the insurance cover as it can get canceled and even your claim can get rejected. However, as you submit income proof, such things are not likely to happen.
Why it is a good idea to buy a term insurance plan?
Purchasing a term insurance policy can never be a bad idea. It can save your family during the most challenging times. How? Read on to know the reasons.
Affordable premiums
The premiums that you pay for a term insurance policy are affordable as compared to many other types of insurance policies. Also, as compared to the premiums, the sum assured under these plans is much higher.
Safety against loan
As you buy a term insurance plan, it will provide your family with the kind of financial security that they need at that point. Even if your family is in debt, they can pay it off with the sum assured that they get.
Coverage for critical illness
Apart from providing financial support on the death of the policyholder, the insured can also get a critical illness cover. Since it is an add-on, you have to pay an extra premium for that. The critical illness cover will help you to get financial support if you are diagnosed with an illness like cancer, kidney failure, cardiac arrest, etc.
Tax benefits
Under Section 80C of the Indian Income Tax Act, you are eligible for a tax benefit for a maximum limit of INR 1.5 lakh for a fiscal year.
Now if you want to buy the best term insurance plan, you can visit a trusted website and compare as many term insurance plans as you want. This will help you to find a lot of information and take your decision accordingly.
Author Bio
Paybima Team
Paybima is an Indian insurance aggregator on a mission to make insurance simple for people. Paybima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. Paybima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.
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