India – November 5, 2026 – A salaried employee can usually show a monthly salary slip and a predictable flow of income. For a freelancer, consultant, shop owner or entrepreneur, income can look very different.

One month can be strong. Another can be slower. There may also be business expenses, loans and employees depending on the same person who supports the household.

This is one reason term insurance is gaining more attention among self-employed professionals. Industry data showed a 58% rise in term insurance purchases by self-employed buyers in FY25. Millennials and Gen Z accounted for 88% of these buyers.

The need is not necessarily different because they are self-employed. The way their income, liabilities and eligibility are assessed can be.

Why Is Term Insurance Demand Rising Among the Self-Employed?

Self-employment has become a significant part of India’s workforce, covering everyone from independent professionals and consultants to small-business owners and founders.

Their financial responsibilities can also extend beyond household expenses.

A business owner may have:

• Business Loans

• Personal Loans Used for the Business

• Office or Shop Expenses

• Family Expenses

• Children’s Financial Goals

• Employees or Partners Depending on Business Continuity

If that person’s income stops unexpectedly, both household and business finances can feel the impact.

A term life insurance policy can provide a death benefit to the nominee if the insured person dies during the policy term, subject to the policy conditions.

For a self-employed person, deciding the cover amount therefore involves looking at more than monthly household spending.

Irregular Income Does Not Automatically Mean You Cannot Get Cover

One common concern among self-employed applicants is income proof. Unlike salaried employees, they may not have salary slips or a fixed monthly credit from an employer.

Traditionally, insurers have relied heavily on documents such as Income Tax Returns and financial statements to assess eligibility. These remain important for many applications.

However, the underwriting process is becoming broader. Industry reports indicate that certain insurers are also using alternative financial indicators, such as credit history, loan repayment records and other financial proofs, for eligible self-employed applicants.

This has helped make term cover accessible to a wider range of non-salaried earners. The exact documents required still depend on the insurer, occupation, income and cover amount.

Why Does Income Proof Matter for Term Insurance?

Income documents help the insurer decide how much cover can reasonably be offered. Suppose someone declares an annual income of ₹10 lakh but applies for a very large sum assured. The insurer needs a financial basis for assessing whether that amount is appropriate. For self-employed applicants, this assessment can use documents such as:

• Income Tax Returns

• Computation of Income

• Bank Statements

• Audited Financial Statements, where applicable

• Business Income Records

• Other Financial Documents Requested by the Insurer

The insurer can also consider age, occupation, health and existing insurance. Providing clear financial records can therefore make the underwriting process easier.

Business Debt Can Change How Much Cover Is Needed

For a self-employed person, personal and business finances can sometimes overlap. A loan may have been taken personally to fund the business. A property could have been used as security. There may also be liabilities that the family would need to deal with if the business owner dies. That makes debt an important part of the cover calculation.

For example, someone may need ₹1.5 crore to support family expenses and future goals. If there is also a ₹40 lakh business liability that could affect family assets, the overall protection requirement may be higher.

Not every business liability needs to be covered through personal term insurance. The legal structure of the business and responsibility for the debt matter too. The useful starting point is to identify which financial obligations could realistically fall on the family.

Why Are Higher Covers Becoming More Common?

The rise in demand is not limited to the number of policies. Higher sum assured amounts are also gaining ground among self-employed buyers. Data from FY25 showed increasing interest in ₹1 crore and above term cover, even though ₹50 lakh remained a popular choice.

Several factors can explain this. Living costs have risen. Younger professionals are also buying insurance earlier, when they can have decades of future income ahead of them. Business owners may additionally need to account for liabilities alongside family expenses.

The right amount still depends on the individual’s finances. A higher cover is useful only when there is a genuine protection requirement behind it.

Monthly Premiums Can Suit Uneven Cash Flow

Self-employed income does not always arrive on the same date every month. This has also influenced how this segment pays for insurance. Industry data has pointed to a growing preference for monthly premium payments among younger self-employed buyers, giving them greater flexibility in managing cash flow.

The total cost and available payment frequencies depend on the policy. Someone with seasonal or irregular earnings should choose a premium schedule they can continue comfortably throughout the required payment period. Consistency matters because missed payments beyond the grace period can cause the policy to lapse.

What Should Self-Employed Professionals Look for in a Term Plan?

Searching for the best term life insurance in India should not come down to the lowest premium alone. For a self-employed buyer, it helps to check:

• Cover Amount Suitable for Family and Relevant Liabilities

• Policy Term

• Premium Payment Options

• Financial Documents Required

• Medical Underwriting Requirements

• Claim Process

• Available Riders

• Policy Exclusions and Conditions

Affordability matters too. A high cover with a premium that becomes difficult to maintain during slower business periods may not be practical. The policy should fit both the protection requirement and the applicant’s longer-term cash flow.

Should Cover Be Based on Business Revenue?

Not directly. Business turnover is not the same as personal income. A company could generate ₹1 crore in revenue but have much lower profits after expenses. The owner’s personal income may be lower still. Insurers therefore look at income and financial records rather than simply treating business turnover as the amount that needs replacing. For the buyer, the focus should also be on the amount the family depends on, personal liabilities and financial goals.

Self-Employment Changes the Assessment, Not the Need for Protection

A self-employed professional may not receive a fixed salary every month, but financial responsibilities still continue. In certain cases, those responsibilities can be wider because household income and business finances are closely connected. The recent rise in term insurance purchases among self-employed buyers reflects greater access as well as growing awareness of that financial risk. The right policy is therefore not simply the one marketed specifically to entrepreneurs or freelancers. It is one that offers suitable cover, accepts the applicant’s financial profile and has a premium structure that can be maintained even when income varies.

FAQs

Can a self-employed person buy term insurance?

Yes. Self-employed professionals can buy term insurance subject to the insurer’s eligibility and underwriting requirements.

Do self-employed applicants need Income Tax Returns?

ITRs are commonly used as income proof. Depending on the insurer and applicant profile, other financial documents or alternative income assessment methods may also be available.

Does irregular income increase the term insurance premium?

Not automatically. Premiums depend on factors such as age, health, sum assured, tenure, smoking status and underwriting. Income mainly helps determine eligibility and suitable cover.

Should business loans be included when calculating term cover?

Consider liabilities that could affect the family if the insured person dies. Whether a particular business debt needs to be included depends on how the debt is structured.

Can freelancers without salary slips get term insurance?

Yes. Salary slips are not the only form of income proof. Insurers can assess eligible self-employed applicants using tax returns, financial statements and other accepted documents.

About Canara HSBC Life Insurance

Canara HSBC Life Insurance Company Limited is an Indian life insurance company offering life insurance and financial protection solutions. Prospective customers can visit the company’s official website for information about its products, eligibility requirements and policy terms.

Disclaimer: This press release may contain forward-looking statements. Forward-looking statements describe future expectations, plans, results, or strategies (including product offerings, regulatory plans and business plans) and may change without notice. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements.

Media Contact
Company Name: Canara HSBC Life Insurance
Contact Person: Karan Singh
Email: Send Email
Country: India
Website: https://www.canarahsbclife.com/