Points to Consider Before Buying Life Insurance for NRI in India

Life insurance plan for NRIs give PIO and OCI Card holders, NRIs and foreign nationals a chance to secure their loved ones back in India in case of their unforeseen death during the policy term. These plans offer large life cover at affordable premiums for a long policy term. But it can be difficult to select the best life insurance in India for NRI, and thus, to help you find the most suitable plan for yourself, we have created a list of things to consider before buying a life insurance for NRI.

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Can NRI buy Life Insurance in India?

Yes, NRIs can buy life insurance in India, as there are several insurers in the Indian market offering life insurance plans specifically designed to fit the needs of NRI customers. The insurers not only offer a variety of customisable features like flexible policy and premium payment terms to suit the needs of an NRI but also provide the option of purchasing the plan online using tele or video medicals. These plans also offer special benefits like smart exit benefits, terminal illness cover, accidental death cover, and an 18% GST waiver on the premiums paid online. But before buying life insurance for NRI, you should consider the following list of things first.

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What Are The Factors to Consider Before Buying Life Insurance for NRI in India?

Here are a few factors to consider before buying life insurance for NRI in India:

  1. Check Your Eligibility

    NRIs, PIO and OCI Card holders and foreign nationals are allowed to buy life insurance in India, subject to fulfillment of certain conditions. NRI refers to an Indian national resident abroad for certain duration, and PIO is a citizen of any country other than Bangladesh or Pakistan, if:

    • the individual has held Indian passport, any time in the past

    • the person or either parents or grand-parents were a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955

    • the individual is a spouse of an Indian citizen or a person referred to in clauses 1 or 2.

    If you are an NRI and want to purchase life insurance in India, you should have a valid passport issued by the Government of India. And for PIO, if you come under any of the above-mentioned categories, then surely you can buy life insurance plan in India. Along with that, you need to make sure you have all the required documents for the specific life insurance for NRI that you are looking to buy.

  2. Choose Your Insurance Company

    After ensuring your eligibility, you need to compare and select the most suitable insurance provider. Different insurers provide different benefits like special exit benefits, return of premiums, and optional riders. You can compare from among 15+ insurers on Policybazaar and buy the life or term insurance plan that best suits your preferences. They will also help you with documentation and other requirements for medical tests, etc.

  3. Applicable Tax Benefits For NRIs

    Life insurance for NRI in India offers tax benefits under sections 80C and 10(10D) of the Income Tax Act, 1961, as per the prevailing tax laws. However, NRIs are also eligible for an 18% GST waiver on the premiums paid online via an NRE (Non-Residential External) bank account in freely convertible currency.

    Insurance policies taken in India can be both affordable and comprehensive. Do evaluate your options vigilantly before selecting a life insurance plan to invest in! 

  4. Identify Your Mode of Premium Payment

    Insurance companies in India offer a variety of premium payment options for NRI customers. NRIs can pay their premiums in a single lump sum, limited premium payment term, or the regular policy term in monthly, semi-annually, or yearly modes. Not only that, most insurers offer an additional 5% discount on the premiums if the preferred mode of premium payment is chosen as annual. This way, you can increase your savings and secure your family at the same time and can get a total of 23% discount on the premiums payable (GST waiver and Additional discount). You should always check and select the most suitable premium payment methods of the policy in advance so that you don’t have to face any trouble later.

  5. Know About Medical Examination Procedure

    Buying life insurance means you have to go through a medical examination. Thanks to the loosened restrictions regarding the purchase of NRI life insurance, you can now buy life insurance without travelling all the way back to India just to get your medicals cleared. With the help of tele and video medical channels, NRIs can schedule and get their medicals cleared from the comfort of their home and purchase life insurance in just a few minutes.

    When the COVID-19 pandemic started, the rules for getting term insurance became stricter. People buying policies had to go for in-person medical tests, and there were limits on coverage. But as time passed and rules became more relaxed, NRIs became eligible for significant coverage of up to Rs. 5 Crores through tele/video medical checkups for term insurance.

  6. Premium Rates

    The premium rates are one of the most important factors to consider before buying life insurance for NRI in India. Term insurance for NRIs (a type of life insurance) in India is at least 50-60% more affordable than international term plans. With NRI life insurance plans, you can secure a large life cover for your family back in India at highly affordable premium rates.

  7. Claim Settlement Ratio and Process

    The claim settlement ratio is the ratio of the total claims received to the total claims placed in a fiscal year. You should always check the company’s CSR values and make sure it is at least 95%, as it gives an insight into the insurer's reliability in settling your family’s potential claims.
    Most insurance companies in India offer a quick claim settlement process for NRIs. Buying NRI life insurance in India can help ease the process for your family as they can get their life insurance claims settled by visiting the company’s office in India. This removes the hassle of your family travelling all the way to your current country of residence just to get their claims settled.

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Why Should NRIs Buy Life Insurance From Indian Insurers?

NRIs should buy life insurance from Indian insurers because of the following reasons:

  • Affordable Term Plans: Life insurance rates in India are much cheaper compared to those in the UK, making them accessible to all social statuses. It's recommended to purchase life and term plans from India even if you're in the UK.

  • Easy Purchase: Geographical constraints are no longer an issue if you want to buy Indian life insurance while living in a different country. You can easily schedule a tele or video medical checkup from the UK.

  • Limited Pay Option: With limited pay, you can finish paying premiums in a short time and maintain coverage for a longer duration, allowing you to save money and work towards your financial goals.

  • Reliability: In India, every insurance company is regulated by IRDAI, which publishes their performance reports in annual reports, providing transparency for potential buyers to check a company's past performance.

  • Pre-Approved Coverage: Policybazaar offers streamlined pre-approved life insurance coverage up to 2 Crores without the need for medical examinations.

  • Global Coverage and Claims Support: Life insurance for NRI provides worldwide coverage and 24/7 claims assistance to NRIs living in the UK.

  • Medical Expenses Included: Many Indian insurers cover medical expenses for NRIs in the UK, making it unnecessary for them to undergo expensive medical tests.

What Are The Additional Benefits Of Life Insurance for NRIs?

Here are the additional benefits of life insurance for NRIs:

  • Accidental Death Benefits: NRIs can choose the Accidental Death Benefit rider with their NRI Term Life Insurance plans, offering extra coverage and added protection in the event of accidental death.

  • Terminal Illness Benefits: Life Insurance for NRI plans offers coverage for terminal illnesses, granting a lump sum payout upon diagnosis.

  • Critical Illness Coverage: Life Insurance for NRI plans provides coverage for specific critical illnesses throughout the policy's term, helping to cover medical expenses related to these illnesses.

  • Premium Waiver on Disability: If an accident leads to total permanent disability and job loss during the policy term, this rider ensures that you won't need to pay the remaining premiums, keeping your coverage in place.

What Documents are Required for Buying Life Insurance For NRIs From India?

Here is a list of documents required to buy life insurance for NRIs from Indian insurers:

  • Passport size photographs

  • Passport, both front and back side

  • Last entry-exit stamp

  • Last 6 months' bank statements

  • Foreign Address Proof

  • Employee ID Proof

  • Valid Visa Copy

  • Last 3 Month salary slips

How to Buy Life Insurance for NRIs in India?

Here is how NRIs can buy life insurance plans in India online in just a few simple steps:

  • Step 1: Visit the life insurance for NRI page

  • Step 2: Fill in the required information regarding your name, gender, contact number, DOB, email address, and country of residence

  • Step 3: Enter your yearly income, educational background, smoking habits, and occupation type

  • Step 4: Select the most suitable NRI life insurance plan and proceed to pay

Wrapping It Up

NRI life insurance is not just a financial product that helps you secure your loved ones at affordable premiums but also lets you create wealth in the long run. You can save on your yearly taxes and ensure your family's financial stability in case of your unfortunate demise during the policy term. Life insurance for NRI in India is available online and can be purchased just a few clicks from the comfort of your home.


FAQ's

  • Q: Who is eligible to buy Term Insurance for NRI plans in the UK from India?

    Ans: Here is a list of people who are eligible to buy term plans in the UK from Indian insurers:
    • NRIs (Non-resident Indians)
    • OCIs (Overseas Citizenship of India) cardholders
    • PIOs (Persons of Indian Origin)
    • Foreign Nationals
  • Q: How do you get a GST Waiver or Refund on Life Insurance for NRI Premiums?

    Ans: You can get a GST waiver on premium payments by providing proof of your NRE Account and bank details when purchasing term insurance for NRIs. If you didn't initially opt for the waiver, you can still request a GST refund by submitting the necessary documents.
  • Q: Can NRIs Make Payments in International Currency?

    Ans: Yes, NRIs can make payments in international currency, but the amount will be converted to INR using the prevailing conversion rates.
  • Q: Can NRIs Nominate Individuals Outside India for their Life Insurance for NRI plans?

    Ans: Yes, NRIs can appoint nominees who reside outside India for their term insurance for NRI plans.
  • Q: Will Life Insurance for NRI Cover Nominees Who Change Countries?

    Ans: Yes, life insurance for NRIs in India will still cover your nominee even if they change their country of residence.
  • Q: Can I get coverage for critical illnesses with Life Insurance for NRI plans?

    Ans: Yes, you can get coverage for critical illnesses with Life Insurance for NRI plans. Some NRI life and term insurance plans offer coverage for specific critical illnesses, but it may vary by policy.
  • Q: Can NRI take life insurance in India?

    Ans: Yes, NRI can take life insurance in India.
  • Q: Can US citizens buy life insurance in India?

    Ans: Yes, US citizens can buy life insurance in India.

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