Life Insurance Policy for Indian Students Studying Abroad

For Indian students heading overseas, a life insurance policy can provide peace of mind. It ensures that their families won't face sudden financial stress in case of unfortunate events. Plus, when students buy a policy early, they enjoy much lower premiums than those who delay it until later in life.
Let us understand why life insurance matters for Indian students studying abroad and how it can help safeguard their future.

Best Life Insurance Policy for Indian Students Abroad 2025

*Disclaimer: Top 5 plans based on annualized premium for bookings made on https://www.policybazaar.com in the first 6 months of FY 24-25. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. The list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website www.irdai.gov.in

Why do Students need Life Insurance Policy?

Though many people will tell you that students are not required to purchase life insurance policies, there are many reasons why purchasing it as a student is beneficial. 

• To pay existing student loans - Usually, students studying abroad take out student loans to cover the funds for their higher education or overseas education. But in the unfortunate event of the student's death, the parents will be overburdened with the loan payments. In that case, life insurance will help them pay off the outstanding loan.

• To support spouse and children - If the student is married, life insurance will assist the spouse and children after the student dies, maintain a lifestyle, and fund the children's education.

• To support parents - If the student's parents rely on him/her for a living, the life insurance will help the parents after his/her death.

Benefits of Buying Life Insurance as an Indian Student Studying Abroad

As a student, you have special benefits when buying life insurance. Below is a list of some of these benefits:

• Lower Premiums - When you purchase life insurance as a student, your premiums are significantly lower as you're still young. That is because the odds of you being ill are low, making the policy more affordable.

• Affordable Life Insurance Policies in India - As an Indian citizen studying abroad, getting used to the foreign culture is itself a task. Therefore, buying a life insurance policy from the new country can add to the difficulty as you’re not aware of their rules, laws and premium rates. As a result, you can purchase the policy from India and keep paying the premiums online to avoid geographical hassle.

• Protection against unprecedented events - As a student, you may have already availed student loans for your overseas studies. In addition to the financial burdens laid upon your parents, your unforeseen death will add to the agony. In this case, the life insurance will at least help your parents deal with the financial stress.

• Tax Benefits - Section 80C of the Income Tax Act provides tax benefits for life insurance policies. This will allow you to begin earning, and the premium you pay for the plan will assist to minimize your tax liability.

• Wealth Creation - You can use life insurance as a long-term wealth creation tool by choosing plans like ULIP, money-back policy, endowment plan, etc. Here, you receive a maturity amount after the policy's term expires.

Why Indian Students Studying Abroad Buy Life Insurance from India?

Below are some of the reasons why an Indian student studying abroad must purchase life insurance from India:

• Easier Claim Settlement - If something unfortunate happens, your family will need to file a claim. It’s much simpler for them to deal with an Indian insurer under familiar laws and processes. Claiming from a foreign company can mean tricky paperwork, unfamiliar rules, and long delays.

• Lower Premiums for Higher Coverage - Insurance abroad can get expensive, especially for students with limited funds. Life insurance plans in India are often far more affordable, and you can get higher coverage at a lower cost than many foreign policies.

• Familiarity and Trust - Families usually know which Indian insurance companies are reliable. They're familiar with the process, the paperwork, and the terms. This makes the entire buying experience smoother and less stressful. Many insurers now also allow online policy management so that you can handle everything anywhere.

• Tele/Video Medical Check-up - Geographical boundaries are no longer considered an obstacle for NRI customers who want to buy term plans or life insurance plans in India. They can now easily opt for life insurance plans in India that allow them to arrange a tele or video medical check-up from their residential country.

Challenges Faced by Students While Buying Life Insurance

Below mentioned are some of the challenges faced by Indian overseas students buying Life insurance:

• Financial Barrier - As students are not entitled to a static source of income, it becomes difficult for them to manage money for the premiums. 

• Lack of Knowledge - As students are not entirely aware of the concepts and terminologies of Life Insurance, it becomes a problem for them to understand the importance and benefits.

Wrapping it up!

Buying a life insurance policy as a student studying abroad is a good decision to safeguard those who rely on you. Medical tests, treatments, and hospital costs in other countries are much higher than in India. In case something unfortunate happens, your parents may struggle with both emotional pain and huge expenses. Life insurance can help reduce that burden and give your family financial support when they need it most. You can take the help of Policybazaar, which compares over 15 insurance companies, for you to choose your most desirable policy.

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