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A Handy Guide for NRIs Seeking Health Insurance in India

If you are living abroad and want to buy health insurance in India, while considering a return to India, then this article is for you! When analysing, you may not be sure if you will be given any insurance in India or if you can pay for the same through foreign currency or not etc., such doubts are sure to leave you confused.

Rest assured, you’re not the only one going through this struggle. Immigration is so common these days - be it in search of better job opportunities or for business purpose- many non-resident Indians (NRI) face the same dilemmas. However, when it comes to taking any major financial decisions like purchasing health insurance, one should consider sticking to the right decision from the point of view of policy benefits and features, coverage and tax provisions.

 

In this article, we discuss some pointers for NRI’s, who are wondering if purchasing health insurance in India is a possible and smarter option for them.

Are They Eligible?

Yes, they are. An NRI is eligible to purchase a health insurance plan in India and just needs a proof of residence, ITR and other related documents for making the purchase. PIOs (Persons of Indian Origins) can present an Indian passport with other documents.

Consider Complete Understanding of Policy Wordings

If possible, you should spare some time to read and understand the policy document, about its terms and conditions, of at least some of the famous insures in India. Most of the health insurance policies come with a clause of ‘geographical restrictions’, which indicates that the policy will not cover any expense of the insured outside India. In that case, if you reside in the USA and seek medical supervision, the insurance company in India will not cover you for the expenses incurred.

However, some insurance companies in India have started covering their insured outside India as well, but for limited illnesses such as cancer, organ transplant, brain tumour etc.

Underwriting Guidelines for NRIs

Insurance companies are meant to manage risk and considering this, they have well-defined guidelines written for Non-resident Indians, which one has to adhere at the time evaluating any plan. As per insurers, NRIs are supposedly riskier than the people residing in India due to the hurdles of corroborating facts when any claim is made and the resulting struggle to ascertain the authenticity of the same when the person resides abroad.

That’s why most insurer rejects such cases. Those who do cover such situations, obviously have a limited sum Insured and rigid terms regarding the insurer getting medical check-ups done in India etc.

Foreign Exchange Management Act Regulations

NRIs also need to be watchful of the sections of Foreign Exchange Management Act (FEMA) that govern insurance policies.  As the Management (Insurance) Rules, 2000, Regulation 3 states, that an Indian resident may buy or continue with a policy purchased from a foreign insurer when he/she was a resident of a foreign country. Nevertheless, with regard to the issue of buying policies from Indian insurers, the insured can be repatriated the claim amount outside India to the level of the premium paid in the foreign money.

Can Avail Tax Benefits under Indian Income Tax Law

As per Section 80D of the Income Tax Act, the premium paid for health insurance is exempted from the tax deductions. This is also applicable to NRIs who can avail this facility like a resident. As per this Act, a person with an individual health insurance can claim for tax exemption for a premium of up to Rs 25,000. If you have a senior citizen plan for your elderly parents, you can avail tax benefits of up to Rs. 25,000. So, u/s 80D if one has taxable liability in India and is paying a premium for health insurance, they can avail the tax benefits it offers.

Below are some tips an NRI can follow to get the best deal on a stringent budget:

If You Want to Return to India in 3 to 4 Years

In case you have 3 to 4 years of time to plan your return, don’t buy a plan in India. Stick to the insurance company in the country where you’re residing now.

If the Time to Return in Less than 3-4 Years Away

Instead of purchasing a comprehensive health insurance plan in abroad, consider taking a cover in India, if your visit happens to be sooner. After considering the policy terms and benefits, if you find it is as per your requirements, go for it.

One advantage of taking the plan early is that once you’re back to India, you can avoid the pressure of buying health insurance as soon as you land. Again, if you are looking for a family plan, your research will take a while to find the best family floater health insurance plans in India. Moreover, the best part is that the clause for waiting period will be served while you’re still abroad. Once your waiting period of 3 to 4 years for pre-existing conditions will be served, you’ll be eligible to claim your insurance if any crisis arises once you are back.

What If You’re Migrating Abroad and Already Have Health Insurance with Indian Insurer

You're certain that you will return to India, after a certain period, when moving abroad. Here, it is wise to continue with the health insurance that you bought in India, rather buying a new policy in the new country.

If your stay will be long and you’re quite sure of it then you shouldn’t continue with the policy in India. In this case, it’s better to buy a new plan abroad and avail its benefits. The main reason for this is that as per the geographical clause the policy may not be useful for you. So, don’t let anything to become a drain on your finances.

Wrapping Up!

Holding a health insurance policy in India is a wise decision only if you want to settle in India. After residing in a foreign country, very few can develop the temperament to return to India. Else, the annual premium can be a burden and you’ll not be able to enjoy it fullest. Always take the time to understand the terms and conditions of the policy document, so that you don’t miss any clause, especially in the geographical restrictions area. Buy a plan only once you’re totally convinced. Hope we helped!

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