Term insurance offers assured financial protection to your dependents in your absence during the policy term. This makes it one of the most essential financial products in financial planning along with the other benefits. It is an affordable option to get high insurance coverage` for your family members. Term plans can also be customised to meet your needs with various optional riders, premium payment terms and payout methods to choose from.

However, before you purchase a term plan, you must understand the eligibility requirements. Term insurance eligibility refers to the basic criteria you must meet in order to buy the plan. Understanding the factors that affect term insurance eligibility in India can help you make an informed choice.

Basic Eligibility Criteria

Below are some factors you need to know about a term insurance plan’s eligibility criterion:

Age

The age of the policyholder plays a critical role in term insurance, as it affects the premium. Term insurance caters to a large age group. Generally, you can purchase the plan between the ages of 18 and 65 years.

Citizenship/Residency

Term insurance does not have any strict guidelines on citizenship. The plan can be purchased by all types of individuals, such as Indian citizens or Non-Resident Indians (NRIs).

Health status

The policyholder’s health is another critical aspect that insurance companies evaluate before selling a term insurance plan. Your health directly impacts the premium for your plan. If you are healthy, you can get a term plan with a low premium. However, if you suffer from poor health conditions like diabetes, hypertension or others, the insurance company can determine a higher premium or even deny your application.


Financial eligibility

A term insurance plan is a long-term financial commitment. The tenures for term plans can be as long as 20 to 30 years or whole life. Therefore, it is important to ensure that you have the financial means to cover the premium payments for the entire duration of the plan. Insurance companies may conduct a financial check to confirm your financial standing before selling you the plan.

Employment status

Your employment status affects your ability to pay premiums. This is why insurance companies check whether you are self-employed, salaried or working part-time. Insurance companies may also require proof of income to determine the amount of coverage you are eligible for.


Policy specifics

Each insurance company has its own set of policies and criteria that you must meet to qualify for insurance coverage`. For example, some term insurance policies require a medical examination as part of the issuance process. Others may have minimum and maximum coverage limits.

Coverage amount

The coverage amount can affect your term insurance eligibility. The insurer may evaluate your financial stability to determine whether the chosen coverage amount aligns with your income, assets and other financial considerations.

Medical examinations

A medical exam is mandatory for many term insurance plans. Medical tests allow insurance companies to evaluate your health. On the basis of the results, the company decides your premium.

Pre-existing conditions

Pre-existing health conditions such as asthma, diabetes or any other medical condition may affect term insurance eligibility. These conditions can impact the premium of the plan. People with pre-existing conditions are likely to pay a higher premium than those who do not.

Identity proofs and residence proofs:

Below is a list of the documents you can submit as identity and residence proof. You can submit any two documents from the list:

  • Passport
  • Voter’s identity card issued by the Election Commission of India
  • Driver’s license
  • Masked Aadhaar Card



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