Published on June 29th, 2022
Life can be very unpredictable and have its own set of uncertainties. As an earning member of your family, you may be contributing your share of the many expenses arising on a day-to-day basis.
You may also be the sole breadwinner if your spouse is a homemaker. If you unfortunately and unexpectedly pass away, then it can get very difficult for your family to maintain their financial stability since your income will be immediately cut off.
To negate this, you can take the help of a term insurance plan, which is an excellent, low-cost tool that provides financial protection against eventualities.
By paying premiums, you can ensure that your family gets fixed and assured death benefit in case you pass away during the policy tenure.
Because a term plan is a pure insurance plan, there is no return of premium or maturity benefit if the policyholder survives the policy tenure.
But it is this very factor that allows for a large death benefit amount in exchange for cost-effective premiums. Among all life insurance products, term plans may be the cheapest available.
Insurers have set certain eligibility criteria that you must fulfil in order to purchase a term insurance plan. Let us look at these eligibility criteria in detail.
Term Plan Eligibility Criteria
To be eligible to purchase term insurance from an Indian insurance provider, you must be a citizen of India. Persons of Indian Origin (PIOs) and Non-Resident Indians (NRIs) are also eligible to buy term life insurance in India.
Even if you purchase term insurance in India and then emigrate abroad, your term insurance will be valid until the policy tenure ends.
The minimum entry age for a person who wishes to buy a term plan is 18 years. The upper limit is 60 years. Even if you purchase a term plan at an older age, it may only provide coverage for up to the age of 99 years.
If you purchase a term plan when you’re 18, then the maximum policy tenure can be 75 years. The age requirement may differ from insurer to insurer.
Another point to note is that your premium will be higher the older you are. For young applicants, premiums will be quite low due to the lesser propensity for life-threatening diseases at younger ages.
A health check-up is mandatory for a person to be eligible for a term insurance policy. A health test gives the insurer an idea about your general health in order to mitigate their risk of payout.
If the test reveals something that can lead to diseases or reveals a disease or condition itself, then the insurer may rethink the terms of the policy. You may be charged a higher premium if this is the case.
Read more to know about How Does A Term Life Insurance Work in India?
It is also advisable to be completely transparent and truthful when filling out the application form. Your application may be rejected if your health test reveals something that you didn’t divulge or intentionally hid earlier. In some cases, the claim may be denied if there are discrepancies in the initial form.
Thus, anyone can purchase a term insurance plan in India, provided they fulfil the above criteria. Applicants above 60 years of age may find it hardest to secure a term plan, and even when they do, the premiums are bound to be very high. So, always try to buy term plans when you’re younger.
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