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What is the Eligibility of Term Insurance?

IndianMoney.com Research Team | Posted On Wednesday, August 28,2019, 04:21 PM

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What is the Eligibility of Term Insurance?

 

 

While term insurance is one of the best selling life insurance products, many people are still unaware on why it must be availed and how it helps the insured secure the lives of loved ones. The article discusses who needs term insurance plans and general eligibility for term insurance.

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General Eligibility Criteria of the Term Insurance Plan:

The eligibility of term insurance depends on the insurer. The minimum age of entry is 18 years. Listed below are some general eligibility criteria of the term insurance plan:

  • The buyer of the term insurance plan must be an Indian citizen. The NRIs are also eligible to purchase term life plans. However, the payout will be made in Indian currency as mentioned in the policy documents.
  • The maximum age until which you can avail term life plan is 70-75 years.
  • Term insurance riders offer higher cover at slightly extra premiums.
  • Many insurers make it mandatory for the policy buyer to take a medical test. The medical test is important for the insurer to judge pre-existing conditions.
  • The premium rates for smokers are higher than non-smokers. Many insurers don’t offer term plans to heavy smokers.
  • The documents that must be submitted by the policy buyer are age proof, address proof and proof of identity and income.

See Also: Benefits of Buying Term Insurance Online

Who Can Purchase Term Insurance?

The term insurance plan offers insurance cover to the insured for a particular period of time at a fixed premium amount. It is the most affordable way to secure your family’s future. Listed below are those who must invest in term plans:

Parents: If you are the sole earning member in the family, then you must avail a term insurance plan to ensure the financial stability of your family and dependents. It will help the nominee receive a good amount to support the education of children and take care of the routine expenses.

Newly Married People: Newly married people can avail term insurance either individually or jointly. It secures your spouse financially, in case of an untoward demise. Joint term life plans pay a lump sum amount on death of any one of the insured members.

See Also: Term Insurance For Indians

Young Professionals: Many young professionals avail term plans as soon as they enter the professional world. This helps them secure the financial future of their dependents and enjoy a higher coverage at affordable premiums.

Taxpayers: You enjoy a tax deduction under Section 80C up to Rs 1.5 Lakhs a year on term life premiums.

Why Should you Get a Term Insurance Plan?

Term insurance is a must-have policy for all earning members who wish to cover the risk of the family losing income and financial stability in case of death of breadwinner of the family. Given below are some of the reasons why you must opt for a term life plan:

  • To secure your family’s finances in your absence.
  • In case you are the single earning member of the family.
  • If you have dependents like children or old parents.
  • If your kids are financially dependent on you for education.
  • If you have long-term debts like home loan, business loans, personal loans.
  • To secure your family if you are still an important contributor to the family income even after retirement.

See Also: Benefits of Buying Term Insurance Online

The term insurance plan is suitable for all income groups and helps secure family members in the most economical way. Term insurance helps your family receive a lump sum amount on death within the policy tenure. It helps compensate for the loss of family income, settle all debts as well as remain financially secure and live with pride.

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