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Features
Ref. No. KLI/22-23/E-BB/492
Before purchasing a term insurance plan, you should understand the basic eligibility requirements. These include age, income, health, and other personal factors. Your term insurance eligibility determines whether you can buy a plan and what kind of coverage you can get. Let’s explore these criteria in detail to help you make an informed choice.
This type of insurance policy is ideal for individuals who want to secure the financial future of their loved ones in case of any unforeseen events. However, before purchasing a term insurance policy, it is important to understand the eligibility criteria that you need to meet to avail yourself of the benefits of the policy.
The lower limit is 18 years, and the maximum age for buying term insurance is 65 years. The age at which you apply for the term insurance will determine the premium you are to pay for it. Additionally, most insurers have a maximum maturity age, often ranging from 75 to 85 years. However, some insurers now offer plans with maturity ages up to 99 or even 100 years, typically referred to as whole life plans. When selecting your policy tenure, ensure it aligns with the insurer’s specified maturity age to maintain continuous coverage.
Anyone applying for term insurance must be an Indian citizen residing in India at the time of purchase. However, term insurance eligibility will remain the same if you leave India for education or work after purchasing.
Your current health condition has a direct impact on term insurance eligibility. Most insurers require applicants to undergo a medical examination to assess existing health risks and potential liabilities. Chronic illnesses, pre-existing conditions, or a history of critical diseases may lead to a higher premium or even denial of coverage. To ensure transparency and avoid complications during the claim process, always disclose accurate and complete details about your medical history.
Your income plays a key role in determining term insurance eligibility. Most insurance providers consider a minimum annual income threshold, often starting from around ₹5 Lakhs, to qualify for a term plan. However, many insurers also offer plans for individuals with lower incomes, depending on their underwriting policy.
Moreover, your income also determines the maximum sum assured you can opt for. This is typically calculated using a multiplier based on your age bracket. For instance, younger applicants may be eligible for a cover of up to 25 times their annual income, while older individuals might qualify for a slightly lower multiple.
Example: Priya is 35 years old and earns ₹20 lakhs annually. She already holds a life insurance policy with a cover of ₹1.5 crores. If her insurer uses a 20X multiplier for her age group, her maximum eligible cover would be:
[(20 x ₹20 Lakhs) - ₹1.5 Crores] = ₹2.5 Crores.
This means Priya can apply for a maximum term insurance cover of ₹2.5 crores, after factoring in her existing policy. Providing accurate income details ensures a suitable and sufficient term plan aligned with your financial responsibilities.
Along with income, your job profile is considered too. You will be charged a premium for your pure-term insurance plan if you work in high-risk environments.
Whether you are a smoker or non-smoker plays a role in deciding your premium. The premiums are considerably higher for smokers.
Your residential address can affect term plan eligibility. Some insurers restrict policy issuance in specific localities due to operational or risk-related concerns. Always verify if your area is covered before applying.
Your existing debts may impact both your term life insurance eligibility and the cover amount. A high debt burden could affect your ability to pay premiums. Be transparent about your liabilities to help insurers recommend an appropriate sum assured.
If you are considering purchasing term insurance, there are several documents that you will need to provide to the insurer. These documents serve as proof of your identity, age, and health status and are used by the insurer to assess the risk associated with insuring you. Some of the important documents are as follows:
An official photo ID would be required to purchase an insurance policy to safeguard against fraud and widespread identity theft. The following list of documents can be used as identity proof:
Official proof of a permanent address is essential for buying documents required to claim a term insurance policy as it prevents insurance fraud. Documents that can be used are:
A term insurance plan requires proof of age because your age affects your premium. The insurance documents that might serve as age verification are:
Your medical health has a significant impact on both the assured amount and your insurance price. Your medical records are a crucial component of your paperwork because of this. They not only help assess your health risk but may also support claims for tax deductions under Section 80D, if applicable riders are included in your policy.
A predetermined quantity of passport-size photos must be submitted for verification.
Term life insurance is intended to give your loved ones financial security in the event of your untimely passing. Unlike other types of life insurance policies, term life insurance does not accumulate any cash value over time, making it an affordable option for many people. But who is eligible for term insurance? Let us find out.
Anyone who is of legal age and has dependents can buy term life insurance. Dependents can be children, a spouse, elderly parents, or any other person who relies on you financially. Term life insurance provides a lump-sum payout to your beneficiaries if you pass away within the term of the policy. This payout can be used to pay for expenses such as mortgages, education costs, funeral expenses, and other financial obligations.
Individuals who have a mortgage, personal loan, or other debts can benefit from term life insurance. In the event of the policyholder’s death, the payout from the insurance policy can be used to pay off any outstanding debts. This can provide peace of mind to the policyholder, knowing that their loved ones will not be burdened with debt after their passing.
Young adults who have just started their careers can also buy term life insurance. While many people in this age group may not have dependents, buying a term life insurance policy can be a smart investment for their future. Term life insurance premiums are typically lower for younger people because they are considered to be a lower risk. By buying a policy early on in life, the policyholder can lock in a low premium rate for the duration of the policy term.
Individuals who are self-employed or small business owners can also benefit from term life insurance. These individuals may not have access to employer-sponsored life insurance policies, making term life insurance an important consideration. A term life insurance policy can help protect the business and ensure that it continues to operate in the event of the owner’s untimely death.
Individuals who are looking for a simple and affordable life insurance policy can also consider term life insurance. Term life insurance is generally more affordable than other types of life insurance policies, such as whole life insurance. It provides basic protection for your loved ones at a reasonable cost, making it an attractive option for many people.
Life is full of uncertainties, and no one can predict what the future holds. That’s why it’s crucial to plan for the unexpected, and one way to do that is by getting a term life insurance plan. Following are the reasons why you must get a term life insurance plan:
The primary reason for getting a term life insurance plan to provide financial protection to your loved ones in case of your untimely death. If you are the primary breadwinner in your family, your family may struggle to make ends meet if something were to happen to you. A term life insurance policy can help cover expenses such as mortgage payments, education costs, and daily living expenses, ensuring that your family doesn’t face financial hardship in your absence.
Term life insurance policies are relatively affordable compared to other types of life insurance. The premiums for term life insurance are generally lower because the policy only covers a specific period, and there is no investment component involved. This makes it an attractive option for young families and individuals with limited budgets who want to ensure financial security for their loved ones. Even high-value plans, such as 1 Crore Term Insurance, are available at reasonable premiums, especially for young and healthy applicants.
Another advantage of term life insurance is that it offers flexibility in choosing the coverage amount and duration. You can choose the amount of coverage you need, depending on your financial obligations and the lifestyle you want to provide for your loved ones. Additionally, you can choose the duration of the policy, depending on how long you want to provide financial security to your family.
Having a term life insurance policy gives you peace of mind, knowing that your loved ones will be taken care of if something were to happen to you. This peace of mind can be invaluable, especially if you have dependents who rely on you financially.
Term life insurance policies are relatively straightforward, and it’s easy to understand what you’re getting. Unlike other types of life insurance policies, there are no complicated investment components or hidden fees. This makes it easier to shop around for policies and compare them to find the best coverage for your needs.
Eligibility criteria for buying term insurance in India is an important aspect that needs to be considered by anyone who is planning to buy a policy. The criteria may differ from one insurance company to another, but there are some basic requirements that are common across the board, such as the minimum and maximum age limits, minimum and maximum sum assured, and the overall health and medical history of the applicant.
It is important for individuals to carefully evaluate their needs and financial goals before choosing a term insurance policy. They should also compare the policies offered by different insurance companies to find the one that best suits their requirements. Before finalizing a policy, utilize tools like the term insurance calculator estimate your premium and coverage requirements more accurately. By meeting the eligibility criteria and selecting the right policy, individuals can secure their financial future and ensure that their loved ones are taken care of in the event of an unfortunate occurrence.
1
The minimum age to buy a term insurance policy is typically 18 years. At this age, the individual is considered legally capable of entering into a financial contract.
2
The maximum age to buy term insurance is usually 65 years, though it may vary slightly among insurers. However, some policies offer coverage until 85, 99, or even 100 years of age, depending on the plan chosen.
3
Yes, NRIs can apply for term insurance in India. They need to fulfill specific documentation and KYC requirements, and the policy can often be issued with or without a medical examination, depending on the insurer’s terms.
4
Medical tests are usually required, especially for higher cover amounts or older applicants. The insurer uses the results to assess health risks and determine premium rates or coverage eligibility.
5
Documents like ID proof (Aadhaar, PAN), address proof (passport, utility bills), income proof (salary slips, ITR), age proof (birth certificate, school leaving certificate), and recent medical records are commonly required.
6
It is difficult for someone without a regular income to qualify for term insurance, as income is a key criterion in assessing eligibility and determining the sum assured. However, homemakers may be able to buy a policy if the earning spouse already has adequate coverage.
Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.
Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors
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.
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