How my HDFC Life Click To Protect policy got rejected

Term life insurance plan is meant to protect your family from income loss in the event of an untimely death. Income proof is necessary to get a term policy. Salaried individuals are required to furnish their payslips, while self employed individuals are required to furnish their Income tax returns (ITRs). The main question for self employed individuals, as far as their ITR is concerned, is what is the nature of income that their ITRs are showing. Is the income coming from business, consultancy, freelance work etc, or is it coming from their investments (e.g. real estate, fixed deposits, stocks, bonds etc.)? If all the income is coming from investments, then there is no need for an individual to get a life insurance policy, as there will be no loss of income to the family even in the event of an unfortunate death because the asset will be inherited by the nominee / legal heir of the individual and income will continue to accrue to insured’s nominee / dependents.

However, if the individual has income from business / consultancy / any other work, then the family / dependents will face income loss in the event of an unfortunate death of the insured. Therefore, the Income Tax Return of a self employed individual should provide sufficient evidence to the insurance company, that the self employed individual is earning income through his or her “work” in business / consultancy / freelance etc. The insurance company may also want to evaluate, how sustainable is your income from business / salary etc and they may want to see prior year ITRs. We will not comment on how a particular life insurance company evaluates the proposal form of a particular individual. We have discussed the key requirement, insurance companies are looking for, in order to issue a life insurance policy to you. If you think that the income proof that you have now, satisfies the requirements of the insurance company discussed above, then there is no reason, why you will not get a term life insurance policy.