Term insurance offers financial protection to the family of insured in case of demise. Every bread-earner wishes to offer financial security to his/her family in some way. In addition to Indian citizens, NRIs (Non Resident Indians) are also eligible for the same. Here is the process of availing term insurance for NRIs and the features of the policy designed to benefit them.
NRI willing to buy term insurance can apply for the same in 2 ways-
Your premium is decided on age at which you buy the policy and remains same, throughout your life
Premiums can increase between 4-8% each year after your Birthday
Your policy application could be rejected or premiums increase by 50-100%, if you develop a lifestyle disease
Term insurance policy for NRI generally can have tenure from 6 months to 25 years. The minimum age for getting NRI insurance is 18 years and the maximum age varies from 55 to 60 years depending on the terms and conditions stated in the policy.
Premium and Sum Assured:
Sum assured for NRI term plan varies from a minimum of Rs. 2 lakhs to a maximum of Rs. 1 crore. There is no fixed premium as the amount of premium depends on the following factors - term of the policy, sum assured, payment frequency of premium (monthly, quarterly, half yearly, annual) and the riders opted, if any. In case of demise of the policyholder, the sum assured is paid to the nominee in his/ her NRE account.
In case you miss out the date of premium payment then a feature known as grace period is offered for the same. Your policy is not abolished if you are able to pay the pending premium during this period. For policy with premium payment frequency of 6 months or 1 year, the grace period is of 15 days.
Policy Renewal :
There are some term insurance policies which offer option for renewal of policy at the time of maturity. The process requires the insured to pass through some tests related to health for meeting the criteria of renewal. Also, you should have a good track record where there are no delays or dues in payment of premium on date.
Premium Payment through Internet Banking:
Non Residential Indians also have the option of paying premium through internet banking. For this process, the insured needs to have an account in any of the authorized bank that permits electronic transaction to insurance company. An NRI must be aware and well informed about all the terms and conditions related to internet banking when making a premium payment. Various online payment modes include- Remittance in foreign currency, NRO bank account, NRE/ FCNR bank account.
The documents required by the insurance company include- proposal form, proof of age and income, report on health condition, attested passport copy, application amount that is equal to first premium, etc. When purchasing insurance via Mail Order Business; the insurance company might ask for some additional documents as well. There are some insurance companies which categorize the lives of people for setting the premium and sum assured. Here the sum assured depends on the nature of job, country of residence and income of the policyholder.
The various companies offering term plans for NRIs are - Life Insurance Corporation of India (LIC), ICICI Prudential Life Insurance, Max Life Insurance and Kotak Life insurance. The awareness for insurance and its significance has slowly taken a good position among people all across the globe. The popularity of term insurance among NRIs has given various companies a platform to capitalize the potential and drive a mutual growth.
Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer