Non-Resident Indian, or NRI for short, is a term that refers to an Indian citizen who resides outside India 182 days in a financial year, but still maintains strong ties to their homeland. As Non-Resident Indians, they contribute to the cultural, economic, and social fabric of both their adopted countries and India, bridging gaps and fostering connections between diverse cultures and communities.
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Individual living in India since birth
Individual living for 182 days in the preceding financial year in India
Individual living for 60 days in that year specifically
Or been here for 365 days straight for the last four years
The above mentioned are the criteria for ‘Indian Resident' and a person who does not fulfill them is a Non-resident Indian and is treated as an NRI for paying the income tax.
NRIs maintain strong ties to India, including financial, cultural, and family connections and can also benefit from insurance policies offered by various insurers in India.
A non-residential Indian is a person who stays in India for less than 182 days during the period of the foreseeing financial year.
An NRI can also refer to someone who has left the country for work. A person residing overseas for business-related reasons is also considered an NRI.
The people living abroad are classified into three major categories, namely Non-resident Indians (NRIs), Overseas Citizens of India (OCIs), and Persons of Indian Origin (PIOs).
Under Section 6 of the IT Act, 1961, an individual who is an Indian Citizen or is of Indian origin, is considered to be an NRI. An individual is deemed to be a resident in India in a particular previous year if any of the following conditions are met:
If the individual stays in India for a period of 182 days or more during the previous year.
If the individual stays in India for a period of 60 days or more during the previous year and 365 days or more during the four years immediately preceding the previous year.
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A Person of Indian Origin (PIO) refers to an individual who has foreign citizenship (except of Pakistan, Afghanistan Bangladesh, China, Iran, Bhutan, Sri Lanka and Nepal) or residency but has ancestral roots or family connections to India.
PIOs are individuals of Indian origin or descent who may have migrated to other countries, such as the United States, Canada, the United Kingdom, Australia, or elsewhere
OCIs, or Overseas Citizens of India, refer to individuals who have foreign citizenship (except for Pakistan and Bangladesh) but have a special status that provides them with certain privileges and rights in India.
The OCI status was introduced by the Indian government to establish a more formal and secure connection between the Indian diaspora and their country of origin.
The OCI status grants several benefits, such as multiple-entry, multi-purpose lifelong visas to visit India etc.
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There are eligibility criteria for the NRIs and OCI cardholders before proceeding with India's legal activities. The proof of identity for any NRI is an essential document. Here is the criteria list:
Indian Passport: NRIs should possess a valid Indian passport as proof of Indian citizenship. The passport must not have expired and should be duly stamped with the necessary visas and immigration stamps.
Citizenship: As a Non-Resident Indian (NRI), you must hold Indian citizenship as per the Citizenship Act of 1955. This means that either you, your parents, or your grandparents need to be citizens of India.
Spouse: You must be the husband or wife of an Indian citizen or meet the requirements mentioned above.
Residency Requirement: To qualify as an NRI, an individual must reside outside India for a minimum period of 182 days or more in the preceding financial year.
Along with Indian citizens, Non-Residential Indians can also apply for the same. One can appeal to the policies in two ways.
You have the option to purchase the insurance policy when you visit India. Once the necessary legal procedures for the insurance policy's approval are completed, your policy will be treated like any other policies held by Indian citizens.
You have the option to purchase an insurance plan directly from your current location through a Mail Order Business. The policy will be authenticated by a notary, an official from the Indian Embassy, and an Indian diplomat. Students can also contact their dean to get the policy verified.
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Many insurance companies in India offer their investment plans for NRIs as well. However, their terms and conditions may be slightly different from those of regular Indian residents.
The duration of an insurance policy for Non-Resident Indians (NRIs) can vary from 6 months to as long as 25 years. NRIs can obtain insurance coverage starting from the age of 18 up to the age of 60. The specific length of the policy is determined by the terms and conditions specified in the policy document.
The NRI insurance policy doesn't have a set amount for the premium. The initial payment, known as the premium, will vary based on different factors such as the policy terms, the assured coverage amount, the premium payment regulations, and the selected options for additional coverage, if applicable.
The amount of coverage for an NRI policy can range from hundreds of thousands as the minimum amount to millions as the maximum amount. This coverage amount will be paid to the nominee of the insured's NRE account in the event of the insured's passing during the policy term.
An advantage of NRI policies is that you are provided with a grace period in case you have missed the date to pay your premium amount. If you can pay the remaining premium amount within this period, your policy will not be terminated.
As an NRI, you have access to insurance policies that provide options to renew your policy when it reaches maturity. To qualify for renewal, you'll need to undergo various health tests to meet the necessary requirements. Additionally, it's important to maintain a clean record by making premium payments on time without any delays or outstanding dues.
As a Non-Residential Indian, you have the privilege to pay the premium amount using Internet banking. To proceed with this process, the policyholder needs to hold an account in any approved bank that allows access to internet transactions to the insurance company where you purchase your policy. The online payment modes include – settlement in foreign currency, an NRE/FCNR bank account, and an NRO bank account.
Just like Indian residents, NRIs can get tax benefits under Sec 80D or 10(10D) of the Income Tax in India. However, some countries may charge tax on maturity earnings.
Insurance company may require various documents for the procedure, including:
Proof of identity
Attested copy of passport
Health status report
Additional documents that may be needed for Mail Order Business policy, such as:
Proof of income
Proof of age and address
To submit a report on health conditions, you can choose between two options, which are:
Conduct medical examinations in India
Conduct examinations where you reside and submit records to insurer
**Premium and coverage amount determined by insurance companies based on individual classification. It’s suggested that you consult insurer for any additional document requirements
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In conclusion, NRI insurance policies serve as crucial financial protection tools for Non-Resident Indians (NRIs) residing abroad. These policies cater specifically to the unique needs and circumstances of NRIs, providing them with a sense of security and peace of mind.
Past 10 Year annualised returns as on 01-12-2023
^Tax benefit are for Investments made up to Rs.2.5 L/ yr and are subject to change as per tax laws.
*All savings are provided by the insurer as per the IRDAI approved insurance plan.
Tax benefit is subject to changes in tax laws. Standard T&C Apply
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