Can You Get Term Insurance Without Income Proof?

• 2nd Dec 2021
• 186
• Share

​As we all know, 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 a plethora of benefits that add to the comfort, financial stability, and security of your life while also providing a sense of confidence and assurance for your family’s long-term well-being.

From selecting the best pure term plan and insurance provider to obtaining a medical checkup and proof of income, the entire process mandates utmost precision and due attention on your behalf. Yet, when it comes to one of the most commonly asked questions about term policy, the majority of people want to know if they can acquire term insurance without income proof?

The answer to this question would be no. Therefore, buying term insurance without income proof is not possible, as per IRDA term insurance guidelines.

he Significance Of Insurance Regulatory Development Authority of India (IRDAI)

Each sector has to have a centralised organisation that establishes the rules to be followed by that industry. Insurance businesses in India are regulated by the Insurance Regulatory Development Authority of India (IRDAI). This organisation oversees both IRDA Term Insurance and IRDA General Insurance firms. It is the body that establishes the rules and regulations governing the proper operation of the Indian insurance industry, including both life and general insurance. The IRDAI is also responsible for the regulation and development of these sectors.

The Importance Of Income Proof For Buying Term Insurance

When purchasing a pure term plan, you must provide evidence of income. For financial screening purposes, knowing the amount and source of the policyholder’s income is critical to understanding whether the person in question will make the required premium payments for the chosen tenure - thus, one cannot buy term insurance without income proof.

Insurers examine the information provided for buying term plans in the insurance proposal form before deciding whether or not to approve it. The facts given by the customer on the offer document, such as health and income information, is used to establish the highest amount of life insurance that may be obtained for a given premium interest rate. Thus, it eliminates the risk of over-insurance when the insured purchases more coverage than the real cash worth.

Income Documents Required For Buying Term Policy

To rule out the possibility of buying term insurance without income proof, the following documents are required:

• Salary receipts over the previous three months
• Returns from the preceding two years of income taxes
• Your employer’s income certificate
• Bank statement from the last six months
• Form 16

To conclude, the financial element of purchasing term plans must be addressed before proceeding with the actual purchase. To guarantee that you have the best opportunity of finding 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, it’s a good idea to get a head start on your financial records beforehand.

- A Consumer Education Initiative series by Kotak Life