Buying life insurance for NRI is considered a crucial investment that you can make if you are settled in any foreign country. The life insurance policy protects your family members back home from any financial crunch if any unforeseen event happens to you.
*Tax benefit is subject to changes in tax laws. *Standard T&C Apply
** Discount is offered by the insurance company as approved by IRDAI for the product under File & Use guidelines
Purchasing the plan from your home country, India might be cost-effective for you and the procedure is quite simple. However, before purchasing the policy, you need to understand a few things:
Yes, PIOs and NRIs who live abroad are eligible to purchase a life insurance plan in India. All individuals of Indian origin, irrespective of their residential country or citizenship status in India, can avail such a policy in their homeland to secure themselves and their loved ones.
It is not necessary to be present in India (home country) while purchasing a life insurance plan for NRI. It is best to purchase the plan after comparing all the options available. You are only required to start a written communication with the insurance company. You also have to undergo all the medical check-ups and send the medical reports to the insurer in India if you buy the plan from abroad. However, the medical examination cost will be paid by you.
Here is a list of best life insurance plans for NRIs:
|Insurer||Plan Name||Entry Age||Maturity Age||Policy Term||Sum Assured|
|Kotak Life Insurance||Kotak Preferred Term Plan||18 years -65 years||75 years||10 years – 40 years||Minimum: 25 Lakhs
Maximum: No Limit
|Bajaj Allianz Life Insurance||Bajaj Allianz iSecure||18 years -65 years||85 years||5 years – (85-Entry Age)||Minimum: 25 Lakhs
Maximum: 50 Lakhs
|ICICI Life Insurance||ICICI Pru iProtect||18 years -65 years||75 years||10 years – 30 years||Maximum: No Limit|
|LIC||Amulya Jeevan||18 years -60 years||70 years||5 years -35 years||Minimum: 25 Lakhs
Maximum: No Limit
The premium amount for NRI Life Insurance plans in India can be paid through any of the following modes:
Settlement payment in foreign currency
NRE/FCNR bank account
Non-resident ordinary bank account
It is important to check the type of currency in which the plan is issued as the insurers can issue them in the currency of the NRI’s residential country or in Indian Rupees. If the plan is issued to the Non-Resident Indians in a foreign currency, then they will have to pay the premium amount in that currency from an NRE/FCNR account held in India. And, if the plan is issued in Indian currency, the premium amounts can be paid via NRO accounts However, there are not many insurers that offer plans that can be paid in foreign currency.
Usually, premium amounts are the same for both Indian residents and non-residents for the same plan. But, if NRIs are residing in a country where the risk to your life is higher, premium amounts may be higher. A country that is prone to military or civil issues has a not-so-stable government and faces continuous violent attacks, thus can be considered a high-risk country. In the same way, countries having low risk are categorized by stability in their governance, peace, order conditions, and good law. A Non-Resident Indian residing in a high-risk nation will be charged a higher amount of premium.
The NRI insurance plans from different insurers in India will provide coverage against death regardless of the residential status in the world. The premium return by the insurer for the specific insurance plan will either be in foreign currency or the Indian rupee, as stated in the documents. In order to file a death claim, the nominee is required to submit all the important documents mentioned in the plan.
The amount of death claims or called maturity payouts can be transferred to the residential country only in case the amount is equivalent to the premium amount that was paid by foreign currency. Thus, the premium that was paid in Rupee cannot be transferred.
The benefits will not be transferable if the life assured pays the full amount of premium in Indian currency through an NRO account. Though, if the plan is taken before you become NRI, the benefits that remain transferable are equivalent to the premium amount payable in foreign currency out of the full premium amount paid by the person.
As discussed the rules of purchasing life insurance plans in India. NRIs should ensure that they buy the right one. Here are a few things that should be considered:
Investing in life insurance is a good income source and acts as a protective cover for loved ones. It should be understood that there are number of expenses required in every family member’s milestone of life. In case of the unfortunate death of the sole earning member, a normal income plan can cover such type of loss or any other eventualities through the ROP. So, it is always best to be prepared for these types of risks by opting for suitable life insurance plans.
The premium rate is an important parameter that one needs to consider. The rates of policy are different in different countries. To select the best–priced policy, compare the prices of a life insurance plan in India with the cost of that plan in your residential country. This will help you make an informed decision that which option is suitable for you.
The maturity and death payouts received from the life insurance plan come along with tax savings benefits in India. Though the rules and regulations are not the same in every country, some countries need you to pay tax on maturity rates. Check the tax regulation in your residential country to make a wise decision.
Depending on the above-mentioned information, it is certain that Non-Residents Indians (NRIs) can buy a term plan from India-based insurers. A term offers the right financial investment and financial security to your family members, especially in case of your absence.
If you are NRI and are looking out to purchase term plans in India, you should have Indian residence proof and other criteria of eligibility. Term plans will give you various benefits such as affordable premium rates, rider benefits, extensive coverage, etc.