Term insurance Eligibility Criteria [Documents & Requirements]

Term insurance Eligibility Criteria [Documents & Requirements]

Buying a term insurance plan is one of the simplest ways to secure your family’s financial future. However, every insurer follows certain eligibility criteria that determine who can buy a policy and on what terms. These include factors like age, income, occupation, lifestyle, and health status, all of which influence your premium amount and coverage options. Understanding these criteria helps you make an informed choice and select a plan that fits your long-term goals.

This blog outlines the key eligibility requirements for buying term insurance and explains what applicants should know before applying.

What Is Term Insurance?

Term insurance is a type of life insurance plan that provides financial protection to your family for a fixed period. In case of the policyholder’s death during the term, the nominee receives the sum assured as a death benefit.

It is one of the most affordable forms of life insurance, offering high coverage at relatively low premiums, making it ideal for individuals seeking simple yet effective financial security.

Key Eligibility Criteria for Term Insurance

Eligibility for term insurance depends on factors such as age, income, occupation, and health. Most insurers require applicants to fall within a specific age range and have a stable income to ensure affordability of premiums. These parameters help determine policy approval and coverage amount.

Who is Eligible for Term Insurance

Term insurance is a cost-effective way to secure your family’s financial future, but not everyone automatically qualifies. Generally, individuals between the ages of Term insurance is a cost-effective way to secure your family’s financial future, but not everyone automatically qualifies. Generally, individuals between the ages of 18 and 65 are eligible, although exact age limits may vary by insurer. Insurers also assess health, lifestyle, and medical history before issuing a policy. People with serious pre-existing conditions may face exclusions or higher premiums. Some policies may require a minimum income level to ensure that the insured can afford the premiums. Additionally, residency status matters most Indian insurers require policyholders to be Indian citizens or residents. While term insurance is accessible to a broad audience, eligibility criteria ensure that the policy is both financially viable for the insurer and beneficial for the policyholder. Understanding these requirements helps applicants prepare for a smooth application process and select the right coverage based on their age, health, and lifestyle.

How Income and Occupation Impact Your Eligibility

Income and occupation play a crucial role in determining term insurance eligibility and premium rates. Insurers assess income to ensure that the applicant can comfortably pay premiums and that the sum assured aligns with their financial responsibilities. Individuals with higher income often qualify for larger coverage amounts, while lower-income applicants may have limited options. Occupation is another key factor, as high-risk professions like construction, mining, or firefighting may lead to higher premiums or specific exclusions. Conversely, low-risk office jobs generally attract standard premiums. Some insurers categorize occupations into risk tiers to determine the applicant’s insurability and policy terms. Additionally, irregular or freelance income may require proof of stability to qualify for certain coverage amounts. By understanding how income and occupation affect eligibility, applicants can better plan their coverage, avoid surprises during underwriting, and secure a policy that meets both protection and financial goals.

Entry Age & Maximum Age Limits

Most insurers specify a minimum and maximum entry age for purchasing term insurance. Generally, the minimum age starts at 18 years, while the maximum may range from 60 to 65 years, depending on the insurer.

The policy term is often linked to the entry age, ensuring coverage continues until a reasonable maturity age, usually up to 75 or 80 years. Checking these limits helps you plan timely and adequate life cover.

Sum Assured / Coverage Limits

The sum assured, or coverage amount, is the financial benefit your nominee receives in case of your death during the policy term. The minimum and maximum coverage limits vary across insurers and are influenced by your income, occupation, and lifestyle.

Typically, insurers recommend choosing coverage that equals 10–15 times your annual income to ensure sufficient protection for your family’s future financial needs.

Policy Term / Maturity Age

The policy term determines how long your term insurance coverage remains active. It usually ranges from 10 to 40 years, depending on your age and financial goals.

The maturity age up to which coverage continues typically falls between 65 and 85 years. Selecting the right term ensures your dependents remain financially secure throughout your earning years and beyond.

Citizenship / Residential Status (INR / NRI / OCI / PIO)

Term insurance is available not only to Indian residents but also to NRIs, OCIs, and PIOs, subject to certain conditions. While most insurers allow overseas applicants to buy policies in Indian Rupees, the premium payment and medical requirements may vary based on residency.

Providing valid identification and proof of citizenship or residential status ensures smooth policy issuance and claim processing.

Mandatory Documents Required for Term Insurance Eligibility

Applying for term insurance requires submitting a set of mandatory documents to verify identity, age, income, and health. Typically, insurers ask for proof of identity (Aadhaar, PAN card, or passport), proof of age (birth certificate or school certificate), and address proof (utility bill or Aadhaar). Applicants may also need income proof, such as salary slips, bank statements, or ITR documents, to determine appropriate coverage levels. Additionally, a medical report or health declaration is often required, particularly for higher coverage amounts or older applicants. For policies with large sums assured, insurers may request a detailed medical examination to assess risk. Keeping these documents ready ensures a smooth application process and faster policy issuance. Being aware of documentation requirements upfront helps applicants avoid delays, ensures transparency, and increases the likelihood of getting the desired coverage without unnecessary complications.

Why Should You Get a Term Insurance Plan?

Term insurance is one of the most reliable ways to safeguard your family’s financial future. It ensures that in your absence, your loved ones remain financially independent and secure.

Key benefits include:

• Provides financial protection to your family in case of an untimely death
• Offers high coverage at affordable premiums
• Helps maintain your family’s lifestyle and meet long-term goals
• Covers outstanding loans or liabilities
• Offers tax benefits under Sections 80C and 10(10D)
• Allows flexible policy terms and riders for added benefits
• Acts as an income replacement for dependents
• Brings peace of mind by ensuring long-term financial stability

In short, a term insurance plan offers comprehensive protection at minimal cost, making it an essential part of any responsible financial plan.

Documents Required for Buying Term Insurance Plans

To buy a term insurance plan, you need to provide documents that verify your identity, age, income, and address. These include Aadhaar card, PAN card, passport, or voter ID as identity proof; utility bills or rental agreements as address proof; and salary slips, Form 16, or ITR as income proof.

Some insurers may also request medical test reports to assess health conditions before approving the policy.

AN Nov 20/25