NRI Meaning

Insuring is a way to compensate for the loss. It helps form risk management, primarily used to cope up against the risk of an uncertain loss. In general, insurance policies are financial compensation that the policyholder will receive from the insurance company. There will be an initial payment, and the company will pay for the loss as per the policy language.

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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?

What is NRI?

Let us have some information about NRI meaning and NRI definition:

  • 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.

Who is NRI?

The people living abroad are classified into three major categories, namely Non-resident Indians (NRIs), Overseas Citizen of India (OCIs), and Persons of Indian Origin (PIOs).

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. NRI abbreviation is expanded to be Non-resident Indian. 

Who are PIOs and OCIs?

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.

An OCI is a person who has origin in India but resides in foreign countries except for Pakistan and Bangladesh. They have a lifetime visa. 

NRI Definition as per the Income Tax Act of India

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.

Eligibility Criteria

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 grand-parents have to be Indian citizens.
  • Spouse: You have to be the spouse of an Indian citizen or a person with the criteria mentioned above. 

How can NRIs Get Insurance in India?

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.

Policies and Features of NRI Insurance Plans

Many insurance companies in India offer their insurance plans for NRIs as well. However, their terms and conditions may be slightly different from those for regular Indian residents.

  • Policy Term

    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.

  • Premium

    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. 

  • Sum Assured

    The Sum that is assured for an NRI term may vary from 2 lakhs rupees as the minimum level to 1 Crore rupees 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. 

  • Grace Period

    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.

  • Policy Renewal

    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.

  • Payment of Premium Amount

    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.

  • Tax Benefits

    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.

Required Documents

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, proofs of income, and any proofs 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.

NRI Insurance Policies in India

Here is a rundown of the plans offered by the insurance companies for NRIs:

Aditya Birla Capital Life Insurance

Aditya Birla Capital Life Insurance offers a life insurance plan called ABSLI, which is for Non-Residential Indians as well. Here are some of the details about it. 

  • Age eligibility: 18 years to 65 years
  • Sum Assured (Min): The minimum Sum that is assured is Rs. 25 Lakh
  • Sum Assured (Max): There is no limit for the maximum Sum that is assured.
  • Maturity Age (Max): 85 years 

This plan offers various term schemes plans that the NRIs can benefit from.

Bajaj Allianz Term Insurance Plan

Bajaj Allianz Term Insurance offers a plan called iSecure for the Non-Residential Indians. Here are some of the details about the plan:

  • Age eligibility: 18 years to 60 years
  • Sum Assured (Min): The minimum Sum that is assured for the common category is Rs. 2.5 Lakh and categories split by a preferred non-smoker and smokers are Rs. 20 Lakh.
  • Sum Assured (Max): There is no fixed limit for the maximum Sum that is assured.
  • Policy Terms: 10 to 30 years
  • Maturity Age (Min): 28 years
  • Maturity Age (Max): 70 years 

Benefits upon Death

  • Individual Benefit: If there has been an unfortunate death of the policyholder, the Sum that is assured is given to the nominee of the insurer provided that the premiums are paid up to the date. The cover of the policy will be abolished after the demise of the insurer.
  • Joint Life benefit: In the joint-life benefit, the cover amount is paid on each individual's demise provided by the policy regulation. The policy will be continued for the rest of the insured but the premium amount will decrease. The premium reduction depends on the age of the surviving individuals, their lifestyle, and their term of the policy, their premium payment frequency, and the Sum that is assured of surviving at the start of the policy. The policy will be terminated on the death of the surviving individuals.

Features

  • The insured can select the policy term of 10 to 30 years, depending on your demand.
  • You can alter the frequency of paying the premium amount.
  • If you are married during the policy inception, your spouse can be included only at the policy's start.
  • If you are unmarried by the time of your policy inception, your spouse may be included later in your existing policy.
  • Your loved ones' expenses can be met by choosing for the payment of benefit in annual instalments.  

HDFC Term Insurance Plan

HDFC offers a term insurance plan called Click2Protect life for Non-Residential Indians. Here are some of the details about them. 

  • Age eligibility: 18 years to 65 years
  • Sum Assured (Min): The minimum Sum that is assured is Rs. 20 lakhs
  • Sum Assured (Max): There is no limit for the maximum Sum that is assured.
  • Policy Terms: 10 – 30 years
  • Maturity Age (Min): 28 years
  • Maturity Age (Max): 75 years 

This plan provides you with three options.

  • Life & CI Rebalance: This is a smart cover option that aims to achieve a balance between Death and Critical Illness. The cover in critical illness will increase at each policy anniversary with a corresponding decrease in Life cover. 
  • Life Protect: With this plan, a lump sum is paid on the life Insured death.
  • Income Plus: Under this plan, the life assured is covered for the entire term of the policy and gains a lump sum amount on maturity and regular income starting from the age of 60.

Features

  • It will provide overall financial protection to your family.
  • You can select a cover that will satisfy your needs.
  • Receive income payments from the age of 60 under the income Plus option.
  • Option to claim the cover of a lifetime.
  • Avail additional Sum assured on Accidental Death.
  • Offer special premium rates for females and non-tobacco users.

Kotak Life Insurance

Kotak Life Insurance provides NRIs with an option to invest in India. It offers Kotak Preferred Term Plan and Kotak Term plan to NRIs.

Kotak Preferred Term Plan

  • Age eligibility: 18 years to 65 years
  • Sum Assured (Min): The minimum Sum that is assured is Rs. 25 Lakh
  • Sum Assured (Max): There is no limit for the maximum Sum that is assured.
  • Policy Terms: 5 – 40 years
  • Maturity Age (Min): 23 years
  • Maturity Age (Max): 75 years 

Features

  • Offer high security at a minimal cost.
  • Insured can choose for Immediate Payment or Recurring Payment.
  • Insured can increase or decrease the level of cover according to your requirement.
  • Special rates for female lives and non-tobacco users.
  • Offer flexible options in the payment of premium.

Kotak Term Plan

  • Age Eligibility: 18 years to 65 years
  • Sum Assured (Min): The minimum Sum that is assured is Rs. 25 lakhs
  • Sum Assured (Max): There is no limit for the maximum Sum that is assured.
  • Policy Terms: 5 – 30
  • Maximum Maturity Age: 70  

Features

  • Special rates for female lives and non-smokers.
  • Flexible options in the payment of premiums.
  • Offer a high level of security with minimum cost.
  • Optional Rider plans are available:
    • Kotak Accidental Death Benefit: Under this plan, a lump sum amount is paid on accidental death.
    • Kotak Critical Illness Benefit: Under this plan, a portion of Sum is paid on the admission of a critical illness claim.
    • Kotak Permanent Disability Benefit: With this plan, payments are paid in instalments when ad missioned upon the claim of disability. 

TATA AIA Life Insurance

TATA AIA Life Insurance offers a term insurance plan called iMaha Raksha Supreme plan for Non-Residential Indian. Here are some of the features of this plan:

      • It can cover life coverage up to the age of 85 and holds options for 100 years also.
      • It offers the options to increase the life cover over and above the Sum assured when chosen with Life Stage Plus Option.
      • You can choose between policy terms provided by the company or pay at once.
      • It also offers you to enhance your protection through the rider1 option.
      • It offers a discount on the rate for customers choosing for a higher level of protection.
      • They also offer a differential rate for female lives and non-smokers.

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.

Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.

 

Written By: PolicyBazaar - Updated: 02 July 2021
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Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.
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