Can NRIs Buy Term Plans in India

Indians who reside outside India may want to invest in a term insurance plan in their home country. Luckily, the Foreign Exchange Management Act has allowed NRIs i.e. Non-Resident Indians, and PIO i.e., the Person of Indian Origin to buy term plans in India. Various insurance companies offer customized options that might interest NRIs. If you are an NRI and planning to buy a pocket-friendly term insurance plan, then you might have certain questions in mind like how can NRIs buy term plans in India.

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Term Insurance Plans for NRIs 

Life is unpredictable and every individual should always be prepared for the roller-coaster ride, ups and down at all times. One of the important ways to secure the finances and to protect the future of your loved ones is by purchasing a term insurance plan. Term plan not only safeguards your finances but also provides you a burden-free tomorrow. Everyone is eligible to purchase a term insurance plan, and Non-Resident Indians are no exclusions. Insurance companies offer a wide range of term insurance plans for NRIs that helps them protect the family’s future needs in the absence of the policyholder. 

Can NRIs Buy Term Plans in India? 

Yes, NRIs are eligible to buy a term insurance plan in India, as long as they satisfy the terms and conditions set by the insurance companies. NRIs are residing all over the world and they comprise a significant part of the economic structure. Foreign Exchange Management Act has made it possible and easier for an NRI to buy a term plan in India. An NRI can easily purchase the right term insurance plan and there are two possible ways in which the same can be done. 

An individual can purchase a plan while his/her visit to India. The entire process of purchasing a term plan is as simple and convenient as it is for any Indian Citizen. NRIs can also buy the insurance plan from their current residential place. 

Eligibility to Buy Term Plan for an NRI in India 

There are some conditions for an NRI to buy a term plan in India. However, terms vary from insurer to insurer, the basic requirements are almost the same. 

  • Individuals must have resided outside India for a fixed time or as specified in the policy documents. 
  • An individual should have possessed an Indian passport at a certain point in his/her life. 
  • Parents or grandparents of an individual should be Indian citizens. 
  • Individuals must have been married to a citizen of India. 

The premium rates applicable for NRI term plans vary from company to company, depending on the T & Cs of the policy, the premium paying frequency, age, medical conditions, etc. 

Features of NRI Term Insurance Plans 

  • Policy Term – Term insurance plans for an NRI usually have tenure from 6 months to 25 years. 18 years is the minimum age to buy NRIs term plans and the maximum age varies from 55 years to 60 years, depending on the T & Cs of the policy. 
  • Sum Assured - NRIs term insurance plans have flexible terms and conditions, and the SA (sum assured) ranges from Rs. 2 lacs to Rs. 1 Crore. 
  • Premium – The premium amount varies from one insurance company to another. There are no fixed premium rates as the premium amount depends on the following parameters: policy term, frequency of paying premiums i.e., monthly/quarterly/half-yearly/annually, sum assured, and riders (if any opted). In case of the policyholder’s demise, the nominee receives the sum assured in his/her NRE deposit account. 
  • Grace Period - There is a specific grace period for NRI policyholders, in case of non-payment of premium. Therefore, if for any reason you miss out on paying premiums on time, then there is an option to pay the premium within the specified grace period. The grace period of 15 days is allowed for a policy with a premium payment frequency of 6 months or 1 year. 
  • Policy Renewal - Some insurance companies offer the option of policy renewal for NRIs, subjected to compulsory health check-ups and other parameters such as timely payment of premiums in the past.  
  • Payment of Premium Through Internet Banking - NRIs can pay their premium using internet banking. In this, the policyholder is required to have a bank account in any of the reputed banks that allows the transaction to an insurer. 
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Documents Required to Buy Term Insurance Plan

The following documents are required to buy a term insurance policy for NRI: 

  • Filled proposal form 
  • Attested passport copy of your residential country 
  • Medical reports confirming healthy issues, if any 
  • Age Proof 
  • Income Proof 

Wrapping It Up! 

Term insurance policies for NRIs offer several benefits. They are used to secure their family back in India in case of any unfortunate event. Moreover, the premium amounts of term plans are pocket-friendly. Hence, it is recommended to opt for a term insurance policy for NRIs.   If you are thinking to buy a term insurance plan, ensure to read the terms and conditions of the plan carefully. There are multiple plans available in the market, make sure to compare the benefits and features of all the policies and then purchase a plan that suits your requirements.

Written By: PolicyBazaar

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