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Ref. No. KLI/22-23/E-BB/492
Proof of income is one of the most important factors in the sale of the term insurance policy. It not only establishes your eligibility to buy an insurance policy but can also be a deciding factor in premiums.
To ensure that you have the highest chance of finding a suitable plan that fulfills your requirements and preferences, remember that a term insurance policy without income proof is not an option.
The significance and necessity of investing in term plans have risen to the top of everyone’s list of priorities and financial layouts. A term policy offers many benefits that add to your life’s comfort, financial stability, and security while also providing a sense of confidence and assurance for your family’s long-term well-being.
As per IRDAI term insurance guidelines, you cannot purchase a term insurance plan without income proof. Income proof is important for the following reasons:
Whether you engage an insurance broker or purchase term insurance through online channels, the sale of any policy is contingent upon providing evidence of income. The primary objective is to ascertain that the prospective policyholder meets the minimum income criteria for term insurance.
Verifying salary insurance serves to preempt any issues that may arise during policy payment. It significantly reduces the likelihood of encountering a rejected insurance claim, a situation you undoubtedly want to avoid for your family, especially during challenging times.
Term insurance stands out as a powerful tool in providing financial security to loved ones in case of unforeseen circumstances. However, the purchase of term insurance often comes with the requirement of providing income proof. Let us now understand the importance of income proof for buying term insurance.
One of the crucial steps in acquiring term insurance is submitting the required documents, including income proof. These documents prove your financial status and help the insurance provider determine your premium rates. Listed below are some essential documents required for term insurance.
To avail term insurance, you must provide valid identity proof, such as an Aadhaar card, PAN card, voter ID card, or passport. These documents confirm your identity and help the insurance provider verify your details.
You must submit a document that confirms your current address, such as a utility bill, bank statement, or rental agreement. The address proof is essential to verify your residence, which helps the insurance provider track your whereabouts.
Your age is a significant factor in determining your term insurance premium. You must provide age-proof documents such as birth certificates, school leaving certificates, or passports to verify your age.
You need to provide income proof to confirm your financial standing. Income proof documents include salary slips, bank statements, Form 16, or Income Tax Returns. These documents help the insurance provider assess your financial capacity to pay the premiums and the sum assured.
Medical documents such as medical history, reports, and certificates help the insurance provider determine your health status. This information is essential as it allows the insurer to evaluate the risk of insuring you.
A nominee is a person who will receive the death benefit in case of your demise. You need to provide the nominee details such as name, address, age, and relationship with you.
Term insurance is a straightforward and cost-effective life insurance that provides coverage for a specified term. While the concept may seem simple, the benefits it offers are profound.
A term insurance policy offers financial security to the policyholder’s dependents, safeguarding them against liabilities such as home loans and other debts.
In addition to protecting in the event of death, a term plan includes coverage for critical illnesses. By opting for an essential illness add-on to your term insurance, you can receive a lump sum payment upon diagnosis of conditions like cancer, heart attack, or kidney failure. Refer to the policy documents for a detailed list of covered diseases.
One of the key advantages of a term insurance policy is its affordability, with premiums being the lowest among all types of Life Insurance Plans. Moreover, the sum assured in term plans exceeds the premium amount.
Purchasing a term plan comes with the added advantage of tax benefits. The premium payments are eligible for tax deductions up to a maximum limit of ₹1.5 lakhs in a financial year under Section 80C of the Indian Income Tax Act. Additionally, in the case of a death claim, the payout received by the family is exempt from tax under Section 10(10D).
To broaden the coverage of your term plan and receive additional benefits, you can opt for various add-on covers. Popular add-ons include critical illness coverage, accidental death rider, return of premium rider, and waiver of premium.
To conclude, the financial element of purchasing term plans must be addressed before proceeding. To guarantee that you have the best opportunity to find a plan that meets your needs and desires, keep in mind that term insurance plans without income proof are out of bounds. As a result, getting a head start on your financial records beforehand is a good idea.
1. How to Buy a Term Life Insurance Online
2.Accidental Death Benefit Rider In Term Life Insurance
Features
Ref. No. KLI/22-23/E-BB/2435
The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. The content has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision. Further customer is the advised to go through the sales brochure before conducting any sale. Above illustrations are only for understanding, it is not directly or indirectly related to the performance of any product or plans of Kotak Life.