What Documents are Required to Buy a Life Insurance Plan in India?

2024-11-28

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Key Takeaways

A life insurance policy holds significant importance in protecting your family’s financial needs in the event of your untimely demise.

To buy a life insurance policy, you need to provide various documents that include proof of identity, address, income, age, and medical records.

These documents are essential as they help in the verification of the personal details of the policyholder along with helping the insurer to assess the extent of insurance needed.

To make the most out of the life insurance policy, you should know the available options, assess your needs, check the sum insured and the premium amount, and select your beneficiary.

In case you’ve lost or misplaced the original document(s), you have to inform your insurer quickly and declare the same in the local newspaper to avoid any complications.

What to Do if You Misplace or Lose Original Documents Needed for Term Insurance?

There are various mandatory documents required to buy a term insurance plan; however, if you have misplaced or lost the original documents, you can take the following steps:

Inform your insurance provider immediately.

Declare this loss of document(s) in the local newspaper and share the newspaper clip with your insurance provider.

Sign an indemnity bond stating that you shall return the original documents, in case you find them, to your insurance provider.

Submit all the other documents required to buy term insurance, and consequently, your insurance provider will issue a duplicate copy of the document.

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Do you plan to buy a life insurance policy, because it offers financial cover to you and the family in case of some unpleasant happenings? Before finding the best life insurance plan, you must know the purpose of buying an insurance plan. Do you want to buy a policy to protect the family financially in case of your untimely death? Or you look at the policy as an aid to resolve issues such as:

Payment of outstanding debts
Aid to run house in case of loss of job
A major contributor to a child's higher education?
A combination of all or part of the above?

The purpose to buy a policy helps in evaluating the insurance amount you require for the fulfilment of the same. If you already own a life insurance plan, then it is important to know the benefit of buying an additional policy and what value will it add to the investments and financial security.

By having a purpose, you can buy the best life insurance plan that meets your requirements at an effective cost. It is also necessary to know for whom you want to buy an insurance plan. Who do you want to buy an insurance plan for?

Yourself
Spouse
Child
Dependents

Money can't fill the void your death will leave in the life of your loved ones. But it can work as financial assistance to them in your absence.

Documents for Buying Life Insurance Plan

Your application for a life insurance plan contains information largely under the following four heads. Thus, you will need to provide as many documents as well, to support your information:

Proof of address: Aadhaar, Driving License, Passport
Identity Proof: PAN card, Passport, Driving License
Income Proof: Salary slips, bank statement, ITR
Medical History: Any relevant medical report

Did You Know?

Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs) can also purchase life insurance policies in India without being physically present in the country.

Source

Buying the Life Insurance Plan you Need

Understanding your financial and safety needs and finding the best suitable life insurance plan accordingly is what you need to do. Given below are a few steps and tips to break down your search and find the life insurance plan for your family:

1. Know Your Options

There are two types of life insurance plans:

Pure protection plans
Savings plans

Pure protection plans usually only work in case of an emergency. For example, a term insurance plan or health insurance plan. These plans have lower premiums but have a very important role to play in your family’s survival if anything happens to you.

Savings plans, like unit-linked insurance plans (ULIPs), endowment plans, child plans, retirement and pension plans are designed to help you achieve specific life goals. With these plans, you can hope to achieve your goal within the safety umbrella of a life cover.

For example, if you are saving for your child’s higher education, a child plan will ensure that your child gets the financial support you planned for her/him. In the case of your early demise, the plan continues to invest in your child’s goal and pays the maturity funds to the child as you intended.

2. Assess Your Insurance Need

Your insurance needs consists of two factors:

Your family’s lifestyle and living costs (Covered by pure protection life insurance plans like term life insurance)
Your family’s future goals (cover individually with savings plans)

The assessment of these two will let you know the premium amount you can pay regularly. Remember life insurance comes before investments. So, even if your income and expenses do not allow huge savings, at least the pure protection life insurance plan is a must.

The amount of cover in these plans should, however, depend on the financial need of your family. For example, a term life cover should be large enough to help your family maintain their lifestyle until the children grow up and start earning.

Or you can follow a simple rule of thumb and buy a term life cover at least 10 times your annual income. This will be enough to cover your family’s urgent financial needs for long enough for them to stand on their feet.

The financial goals will be covered individually with your savings plan investments.

Life Insurance - Top Selling Plans

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3. Buy Life Insurance Online

With the availability of online insurance policies, you can find a suitable life insurance plan sitting on your couch or office table. You can check the premium cost of the life insurance plan you want to buy using the online premium calculators.

The calculators also help you compare:

The cost of adding different features and benefits to your plan
Premium amount for different premium payment tenures
The premium cost of paying your policy premium in different modes

The online mode lets you compare different plans, discover the company’s performance and also interact with the customer service.

Learn how to buy a life insurance policy online.

4. Insurance Application & Premium Revision

One of the steps while buying an insurance plan is the application form. You may find that the life insurance application form is a quite detailed document. You need to provide information about your life, occupation, and medical history.

For a healthy individual with a normal medical history, the insurer may allow life cover without a medical examination. However, for most other cases it will be another necessity. If you have a medical condition or a family medical history of certain diseases the insurer may revise your final premium.

Although, this amount could be higher than the originally estimated premium cost, due to your medical history the life cover is even more important for your family. In case of wrong information or hiding a piece of relevant information from the application forms, your family may lose the claim settlement.

Other factors which may cause an upward premium revision after submitting a proposal are:

Occupation
Hobbies
Adverse medical report

The medical examination that the insurer schedules for you is also an important step towards the financial safety of your family. It’ll help you find any medical condition you have been unaware of.

5. Select Your Nominee

At the time of applying for insurance, you need to share the name(s) of the nominee/beneficiary who would receive the sum assured after your death. In the case of a married person, the spouse automatically becomes the nominee. However, you have the option to add your children as a beneficiary.

Documents for Buying Life Insurance Policy | Buy Best Life Insurance Plan

Learn more about how to choose a nominee for your life insurance plan.

Conclusion

Investing in a life insurance plan is an essential step towards safeguarding your family’s future and protecting your finances. To make the process convenient and seamless, it is important to gather all the required documents that include proof of identity, address, income, age, and medical records. Apart from verification of personal details, these documents help your insurance provider assess the coverage you and your family need.

Glossary

Proposal Form: It’s a primary document which is filled to collect personal details for life insurance plans.
Know Your Customer (KYC): It is a mandatory process in which insurers verify the identity and address of their customers.
Policy document: This is the legal contract issued by the insurer to the policyholder once the application is processed.
Premium: It refers to The amount of money that the policyholder pays regularly to keep the life insurance policy active.

FAQs

Yes. You are required to submit proof address that can be an electricity bill, house tax receipt, or a water bill to buy a life insurance policy.

You must provide salary slips or form 16 for the tax assessment of the current year as proof of income while buying a life insurance plan.

Yes. Along with your identity proof, you are also required to submit identity proof of the beneficiary as well to buy a life insurance policy.

For receiving the disbursal amount of the insurance policy, you need to submit a death certificate, claim form, policy bond, FIR copy, post-mortem report if required.

The insurance company sends an intimation letter along with the discharge voucher to the policyholder 2 or 3 months earlier from the date of maturity to make timely payment. You are required to return the duly signed policy bond and the discharge voucher to the insurance company for timely disbursal of the amount.

After assessing the requirement choose the best life insurance policy in India or a whole life insurance policy whichever suits you the best.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.