NRI stands for Non-Resident Indian (NRI). An Indian Citizen who lives in a foreign country for more than one hundred and eighty-three days in a financial year for employment or business will be considered an NRI.
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NRIs can also benefit from insurance policies offered by various insurers in India. But, before coming to that let’s know who is NRI in India?
Table of Content
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’s 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.
Let us have some information about NRI meaning and NRI full form:
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 be a person who has gone out of the nation for employment is called an NRI.
A person staying abroad for business-related purposes is also called 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).
Any individual who is an Indian by descent or by birth, who lives abroad, is categorized as Persons of Indian Origin (PIO). These people who held the passport of countries other than China, Bhutan, Afghanistan, Bangladesh, Pakistan, Nepal, and Sri Lanka were issued an id card previously. Nevertheless, the Government of India withdrew PIO Card Scheme and merged it with the OCI Card Scheme from January 15, 2015.
OCI stands for an Overseas Citizen of India. It is a person who has origin in India but resides in foreign countries except for Pakistan and Bangladesh. They have a lifetime visa.
U/s 6 of the IT Act, 1961, an individual who is an Indian Citizen or is of Indian origin, is considered to be an NRI.
If an individual’s taxable Indian income exceeds Rs 15 Lakh then that individual is considered to be a resident, in case the person:
Visits India for 120 days or more in the preceding year
Has been in the country for a period of 365 days or more in the previous 4 years.
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: If you are an NRI, it becomes essential that you hold the passport issued by the Indian government.
Citizenship: As an NRI, you need to be a citizen of India under the Act of Citizenship, 1955. Either your parents or grandparents have to be citizens of India. To put it simply, you, your parents, or your grandparents have to be Indian citizens.
Spouse: You have to be the spouse of an Indian citizen or a person with the criteria mentioned above.
The insurance policy will provide financial security to the nominee of the policy if the life assured dies during the period of the policy. It extends not only financial protection to your family but is also helpful to meet the needs of your family. And the important fact about term insurance is that it offers the highest returns with minimal premiums. In addition to that, it is a cost-effective and long-term plan. Along with Indian citizens, Non-Residential Indians can also apply for the same. One can appeal to the policies in two ways.
You can buy the policy at the time of your visit to India. After the legal formalities related to the insurance policy's capitalizing, your policy will be considered any other policies claimed by India's citizens.
You can even buy a policy right from the place where you are residing using Mail Order Business. A notary, an Indian Embassy official, and an Indian diplomat will verify the policy. Students can even reach out to their dean for verification.
Many insurance companies in India offer their insurance plans for NRIs as well. However, their terms and conditions may be slightly different from those of regular Indian residents.
The policy period for an NRI may range from 6 months and extend up to 25 years. You can get insurance from the age of 18 to the age of 60. The policy term is subjected to the terms and conditions given in the policy.
There is no fixed premium amount for the NRI insurance policy. The premium, i.e., the initial payment, will depend on various factors – policy term, the cover amount assured, the regulation of premium payment, and the riders' options have chosen, if any.
The Sum that is assured for an NRI term may vary from lakhs as the minimum level to crores as the highest level. The Sum that is assured would be paid to the nominee of the insured's NRE account when the insured passes away during the course of the policy.
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.
You are provided with some insurance policies that can offer policy renewal options at the period of maturity. For this process, the insured needs to get through several tests relevant to their health to meet the applicable criteria for renewal. You also need to have a good record where there are no setbacks or dues in the premium payment on the date.
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. An NRI should be well aware and detailed about all the terms and conditions of internet banking when one makes a premium payment. 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 80 D of the Income Tax in India. However, some countries may charge tax on maturity earnings.
The insurance company may ask for several documents to complete the procedure, like a form for the proposal, proof of identity, a passport copy with attestation, a report on health status, etc. When you purchase a policy through Mail Order Business, the insurance company might demand extra documents also. These may include an application form, passport copy, proof of income, and any proof of age and address.
To submit a report on health conditions, you can choose between two options. One, you can do your medical examinations in India, and the other is you can do it in the place where you reside and submit the records to the insurer. Several insurance companies may classify people's life by fixing the premium and coverage amount.
You can confirm with the insurer what other documents may be required.
Being a Non-Residential Indian and Overseas Citizen of India, you can have a secured life in India with peace. There are many options out there. The information regarding the policies will be better used to provide security to you and your family in India.
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