Overview of Life Insurance Policy
A life insurance policy is a protection tool which may help you create a financial safety net for your family in your absence. It covers the risk of premature demise and pays a death benefit if the life insured passes away prematurely. Moreover, with the different types of life insurance plans available, you can even save up for the different financial goals that you may have. So, in effect, a life insurance policy may help you take care of your financial goals and offer protection too. You just need to keep your requirements in mind while opting for the same and keep the documents required for a life insurance policy handy for easy processing of the same.
Why Buy a Life Insurance Policy?
There are various benefits to buying a life insurance policy. Some of the common ones are as follows–
- The policy provides financial assistance in the case of premature demise. This assistance may help the family take care of their financial needs if the breadwinner passes away.
- Savings-oriented life insurance plans can help you create a corpus for your financial goals.
- Different types of life insurance plans are available in the market. You can choose a plan to match your goal. For instance, child plans can help you secure your child’s financial future while retirement plans help in retirement planning.
- There is a tax benefit with life insurance plans too as the premium paid and the benefits received qualify for tax deduction and exemptions subject to specified terms and conditions.
Documents Required For Buying Life Insurance Policy
When buying a life insurance policy, a few documents are required so that the insurance company can underwrite the policy. Some of the common documents required for a life insurance policy are as follows –
Proposal form
The proposal form is the basis of the insurance contract. It contains various details which you need to provide. The filled-up proposal form depicts all the important information about you that the insurance company needs like your personal details, financial details, medical details, etc. So, you have to fill out the proposal form, sign it and submit it to the insurance company when seeking to buy a life insurance policy.
Identity proof
A valid identity proof includes a list of documents which are accepted by the insurance company. Some of these include the following –
- Aadhaar Card
- Passport
- Voter’s ID Card
- Driving License, etc.
Age proof
When it comes to age proof, there are various documents that you can choose to submit. Some are called standard age proofs while others are considered to be non-standard age proofs, which are less reliable. Some common examples of each of these age proofs are as follows –
Standard age proof
- Birth certificate issued by municipal authorities
- Baptism certificate available from the Family Bible
- School or college records
- Identity Cards of the Government / Public sector employees showing the date of birth
- Any identity card issued by the defence department
- Marriage certificate issued by the Roman Catholic Church
- Passport
- Domicile certificate
Non-standard age proof
- Employers’ service records
- Self-declaration
- E.S.I.S Card
- Ration card
- Electoral roll
- Certificates issued by Village Panchayats, etc.
Address proof
Some of the commonly accepted address proofs include the following –
- Driving License
- Aadhaar Card
- Passport
- Voter’s ID Card , etc.
Income proof
In the case of high-value life insurance plans, income proof might be needed. Some commonly accepted income proofs include the following –
Standard Income Proof: (Any one of the following is acceptable)
- Income Tax Returns (ITRs) with Computation of income of past 3 years.
- Evidence of Salary earned.
- Salary slips of past 3 months certified by the employer with company seal with mandatory requirements like Employee no., PF No., Bank Account number, month etc.
- Latest Employment Contract Letter on company letter head (not more than 3 months old).
- Latest Form 16.
- Bank Statements of the past 6 months showing salary credit in case of salaried individuals only.
- Profit & Loss Accounts and Balance Sheets duly audited by a Chartered Accountant (giving membership number) of past 3 years.
- Form 16A in combination with ITR s/ PNL accounts and Balance sheets of the insured.
- Form 26 AS
Non Standard Income proof:
- Fixed Deposits/MF/Portfolio statements/Monthly SIP
- Car Ownership documents
- Home or Property Loan
- Bank Statement of saving account
- Credit Card limits
Medical reports or questionnaires
Medical reports are not mandatory in all policies. Usually, if you are beyond a specified age, have opted for a high sum assured and/or have an adverse medical history, the insurance company might require certain documents like:
- Based on your existing health conditions, like diabetes, hypertension, asthma, etc., you might also have to fill out and submit relevant health questionnaires detailing the condition and the treatment that you are taking for the same.
Documents Required for Life Insurance Maturity Claims
Given below is a list of documents that should be submitted to claim maturity benefits of a policy:
- A policy discharge form duly filled and signed by the policyholder and 2 witnesses, along with a revenue stamp.
- Original life insurance policy document
- Cancelled cheque and correctly filled bank account mandate form for account credit
- Identity proof copy
- Address proof copy
Importance of Documents Required for Buying Life Insurance Policy
When you buy a life insurance policy, there are various documents required during proposal stage, policy tenure and at the time of maturity. Here are some reasons why correct documentation is helpful:
Examine risk profile
Insurance company go through your health records and income proof to check your overall risk factor. Life insurance is issued faster to applicants who are fit and financially sound, compared to applicants having pre-existing health condition or a low income.
Decide the right coverage
Your age and income profile helps in determining your family responsibilities and earning potential. This in turn helps in deciding the appropriate cover for your family.
Calculation of premium
Your medical history and income details help the insurer to decide on the premiums of life insurance plans. The company assesses these details to understand how much you can afford while considering the risks involved.
Following KYC guidelines
Insurance providers are expected to comply with KYC rules as the correct documentation ensures that your identity is verified and your needs and income status are rightly ensured in the contract.
Quick approvals
Accurately filled forms along with the right document proofs ensure that the policy is issued without hurdles.
Less Chance of Policy Rejection
Wrong, outdated information or incomplete paperwork can lead to rejection of life insurance. Hence, it’s important that you submit correctly filled forms and other proofs.
Policy and Policyholder’s Validity
Verified documentation during policy purchase confirms the policyholder’s identity to avoid any financial dispute later. It also makes sure that the contract generated is legally valid to be used for any future claims.
Easy claim approvals
If you’ve submitted all the accurate documents in the prescribed format, you’ll not face claim rejections and your family will receive financial support on time.
Ease of communication
Contact details like e-mail and mobile number are a part of paperwork. Updated contact information ensures that you receive timely update of any changes in policy, reminders for premium payment or solution for any concerns raised.
Essential Documents for Filing a Life Insurance Death Claim
In case of the death of life assured, the beneficiary should submit the following documents to get the death benefit:
- Attested copy of death certificate issued by local municipal authority
- Death claim intimation form
- NEFT mandate form attested by bank authorities or copy of cancelled cheque or bank account passbook
- Nominee's photo identity & address proof such as copy of Passport, Voter identity card, Aadhar (UID) card, etc.
- PAN Card/Form 60
- Additional documents required on basis of cause of death (Download Form)
- Medical/Natural death
- Copy of Medical Records (Admission Notes, Discharge/ Death Summary, Test Reports etc.)
- Attending Physician’s statement
- Employer certificate (where applicable)
- Accidental/Unnatural death
- First Information Report (FIR) or Panchnama/Police complaint
- Post Mortem Report
- Final Police Investigation Report (if any)
Required Documents for Life Insurance Rider Claims
Given below is a list of documents that may be required while filing for claims involving riders:
- Duly filled claim form
- Identity proof
- First Information Report (FIR) in case of accidents
- Doctor statement explaining injury or cause of death
- Autopsy report in case of accidents
- Police report when enquiry is involved
- Additional documents may be needed as per situation
Process to Buy a Suitable Life Insurance Policy for You
You can buy a life insurance policy online or offline. However, when buying the policy, it is important that you choose the right plan. Here are some tips on how you can do that –
- Choose a plan that matches your financial goals. For instance, if you are looking for protection against premature demise, a term insurance plan might be suitable. On the other hand, if you plan to accumulate a retirement corpus, a deferred annuity plan might be better.
- Choose a tenure that aligns with your financial goals and gives you the funds when you need them.
- An optimal sum assured is important so that the plan benefits are sufficient to meet your goals and needs.
- The premium paying term and frequency should also be such that the premiums are affordable.
- You may enhance the coverage with a choice of riders available with life insurance plans. Choose suitable riders for all-around protection.
Key Takeaway
- A life insurance plan protects your family financially when you’re no longer around.
- Basic documents required for life insurance are ID and address proof, age proof, income proof, medical records along with proposal form.
- Additional documents are needed for depending on claim type – maturity, death or rider-related.
- Complete and correct paperwork ensures quick policy issuance, valid coverage and timely resolution of claims.
- To buy the right life insurance policy, choose policy sum, tenure, premiums that aligns well with your financial goal.
Conclusion
Buying a life insurance policy has become easy with the online mode. Many plans are available online which you can buy in a few clicks. However, you will have to submit a set of specified documents whenever you buy any life insurance policy. These documents establish and verify your identity and also help the insurer underwrite the insurance policy with complete information.
So, check the documents required for a life insurance policy that the insurer wants and keep them handy for quicker issuance of your proposal.
FAQs
Are there any documents required when the life insurance policy reaches maturity?
When the life insurance plan reaches maturity, the insurance company might send a discharge voucher to you before the maturity date. You just have to fill out and submit the discharge voucher so that the maturity benefits are released easily. Other documents required for maturity claim are policy document, identity and address policy, cancelled cheque, age proof, etc. as requested by the insurance company.
Do I have to provide medical records or go through a medical exam when applying for life insurance?
Medical reports are not always necessary but in some cases, you might have to provide the reports or undergo a medical exam when applying for life insurance, if required by the insurer. This usually happens when you are beyond a specified age or you choose a high sum assured. Moreover, if you have mentioned an existing or previous medical condition then also medical records or check-ups might be needed.
Is there a particular age threshold for submitting documents for life insurance?
Documents required for life insurance are applicable for all ages. Even when you buy the policy young, you will have to submit your basic documents like identity proof, age proof, address proof, etc.
What is the ideal processing time for documents and the decision-making process for a life insurance application?
There is no universal time that can be called ideal. Depending on when you submit the documents, the insurance company underwrites the policy at the earliest and tries to issue the coverage. You can check the application processing time with the insurance company when you are applying for coverage.
What is beneficiary information, and why is it needed?
Beneficiary information includes the name of the person who shall receive the death benefit when the life assured passes away. The details present beforehand ensures that the family receives the financial support on time.
Do NRIs need additional documents to buy life insurance?
Apart from the basic documents, NRIs need to provide passport or Visa copy, OCI or PIO card and foreign address proof. Medical reports are also needed depending on the applicant’s age and health.
Can I buy life insurance without income proof?
No, income proof is one of the mandatory documents needed for life insurance plan. You’ve to submit some document that can identify your income level.
How do I update my KYC documents for an existing life insurance policy?
You can update KYC details on the insurance provider’s online platform. Login to your profile and submit the needful documents. You can also update the documents by contacting the insurer via e-mail or phone.
