Term Insurance for NRIs in the USA

As an NRI residing in the USA, you are likely to be constantly worried about the security of your loved ones back in India. If someday anything happens to you, your loved ones should be financially capable of dealing with the loss of income. You can buy a comprehensive term insurance plan from any insurance company in India that enhances its coverage to NRIs in the USA to protect them. Let’s understand more about Term Insurance for NRIs in the USA, the benefits, plans available and how to buy from Policybazaar: 

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Best Indian Term Insurance Plans For NRIs in USA 2023

The best Indian Term Insurance for NRI Plans are mentioned below:

Term Life Insurance Plans in USA Entry Age Maturity Age Sum Assured
ICICI iProtect Smart 18 - 65 years 99 years Min: 1 Crore Max: 2 Crores
HDFC Click 2 Protect Super 18 - 65 years 85 years Min: 1 Crore Max: 2.5 Crores
Max Life Smart Secure Plus 18 - 60 years 85 years Min: 1 Crore Max: 10 Crores
Tata AIA Maha Raksha Supreme 18 - 60 years 85 years Min: 2 Crores Max: 20 Crores
PNB MetLife Mera Term Plan Plus 18 - 50 years 80 years Min: 1 Crore Max: 1.5 Crore

one crore term plan
plus

Term Plans

₹1
Crore

Life Cover

@ Starting from ₹ 16/day+

₹50
LAKH

Life Cover

@ Starting from ₹ 8/day+

₹75
LAKH

Life Cover

@ Starting from ₹ 12/day+

Can NRIs in the USA Buy Term Insurance Plans in India?

Yes, NRIs living in the USA can buy term life insurance in India to secure their families in case of any uncertainty. Whether an NRI lives in India or abroad, the FEMA (Foreign Exchange Management Act) allows NRIs to buy term plans from India. A Non-Resident Indian (NRI) does not necessarily need to live in India to buy a plan, yet in some scenarios, it is easier to buy a term plan in India than abroad.

Why Do NRIs in the USA Need Term Insurance?

Here is why NRIs living in the USA should buy life term insurance policy.

  1. Long-Term Protection

    Term insurance plans provide longer protection for the life assured and his/her family. They can choose a life cover up to 100 years of age.

  2. Financial Stability

    Term plans help NRIs living in the USA in protecting the family’s future by providing financial security even when the main sole earner is not around. Also, it gives comprehensive stability to the loved ones, which helps in living peacefully without panicking about the future.

  3. Easily Accessible

    Your grieving family can visit the nearest insurer’s branch in their residential city to process the claim settlement without travelling or any other hassles. This reduces their hassles and allows them to get their claims settled easily without worrying about travelling to the NRI’s new country of residence just to get their claims settled.

  4. Pay off loans and debts

    In case of an outstanding loan at the time of your demise, the benefits from the plan can help pay off any loan, debt, or financial obligation. However, ensure that the coverage is important to take care of your daily requirements.

  5. Accidental Death Cover

    The accidental death cover offers additional coverage on top of the base life term policy at nominal premiums. The premiums of this rider can be paid along with the base premiums and offer an additional benefit amount in case of the policyholder’s untimely death due to an accident during the policy term.

  6. Terminal Illness Benefit

    The terminal illness benefit of life term insurance policy provides the policyholder with the entire or a part of the sum assured payable on death on diagnosis of a terminal illness during the policy term. This helps the policyholder seek the best medical treatments for a better chance at survival. 

  7. Limited Pay Benefit

    With the limited premium payment option, the NRIs can easily pay off the premiums for the entire policy within a shorter period and enjoy coverage for a longer term. This allows you to save on your premiums and use the remaining amount for your future.

  8. Pre-Approved Coverage

    Policybazaar offers hassle-free pre-approved term insurance coverage up to 2 Crores, eliminating the need for medical tests.

  9. Global Coverage and Claim Assistance

    NRI term insurance provides worldwide coverage and 24/7 claim assistance to the NRIs of the USA.

  10. Medical Costs Covered

    Many Indian insurers cover the medical expenses required for buying term insurance for NRIs, saving the USA-based NRIs from expensive medical tests.

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Why Buying Term Insurance From India is More Beneficial for NRIs Living in the USA?

Following are some of the points NRI should consider while purchasing a term insurance plan from India:

  1. Large number of insurance companies

    There are many insurance companies listed under IRDAI in India that offer comprehensive term insurance for NRIs with high coverage at low premium rates. NRIs can easily buy term plans from any of the companies with an easy and quick online process. Indian term insurers offer various benefits for NRIs living in the USA than international term life insurance plans:

    • Financial protection for family in India

    • Long-term coverage, i.e., up to 100 years of age

    • Sum assured can go up to 20 Crores

    • The easy and hassle-free payment process

  2. Affordable Premium Rates

    Term insurance plans for NRIs from India come with a difference of around 50-60% in price, especially when compared with developed countries. The Term insurance for NRIs plans purchased from India would result in a 50-60% lower premium than international term life insurance plans. But the price difference may vary from country to country. So, it is always suggested to buy term insurance plans in the USA from India after you compare from among the best term plans available in India.
    Indian term plans, the best part is that the affordability of term plans comes along with the features and benefits that cater to Indian customers. Whereas the protection plans in the USA might have been specifically designed to cater to the needs of that country.
    Let’s understand this with the help of an example:
    In the USA, the term life insurance rates for a death benefit or a sum assured amount of Rs. 2.05 Crore for a 35-year-old individual is around Rs.2239 per month for a policy tenure of 15 years. And in India, the term insurance for NRIs premium rates are as low as around Rs.2142 per month.
    Simply put, international term life insurance plans in the USA will cost you more than Indian protection plans.So, it is always suggested to buy term insurance plans in the USA from India at affordable premium rates.
    **Note: You can compute the term insurance plan premium rate with term insurance for the NRI premium calculator.

  3. Availability of Tele or Video Medical Check-Ups

    Geographical boundaries are no longer a barrier if you want to buy term plan in India. NRIs can now easily opt for protection plans in India that allow them to schedule a tele or video medical check-up from their residential country.
    Tele-medical examination in life insurance term plans is simple as the company follows the tele-underwriting process under which the authorized practitioner, on behalf of the insurer, makes a call to understand the current medical state and history of the customer. The doctor will then ask certain questions to check the lifestyle practices and medical conditions. In response, he/she has to provide the right details over a video or phone call.
    At the start of the pandemic, the underwriting guidelines became stricter, and policy buyers had to go through in-person medical examinations. Coverage limits were imposed. However, with the easing of rules, NRIs can now get large pure risk cover of up to 5 Crores through tele-medical checkups for term insurance.

  4. Claim Benefit

    Once a term plan is issued, any insurer in India will provide coverage against death regardless of the NRI’s residential country. In order to submit the death claims, the beneficiary/nominee of the plan will have to submit all the necessary documents requested by the insurance company. Taxes and tax savings benefits on the term insurance for NRI plans are based on the income tax laws prevailing in the country where the NRI resides.

  5. Claim Settlement Ratio (CSR)

    CSR is the percentage of claims that an insurer settles annually out of the total claims registered. It indicates the credibility and reliability of the insurance company. As per IRDAI, the term insurance company having CSR above 95% is considered good and shows the quick settlement of claims. So, almost all the Indian companies have a good CSR value, like HDFC Life’s CSR is 98.66%, ICICI Prudential Life’s CSR is 97.82%, and Max Life’s CSR is 99.34% for FY 2021-22.

  6. Special Exit Option

    A special exit facility allows the policyholder to opt out of the plan at a certain point and get a refund of all the premium amount paid for pure risk cover protection. No-cost term insurance plans are also available in the Indian insurance market by Max Life and HDFC Life, which offer the option to exit the life term policy at a certain age and receive back all the premiums that he/she paid minus GST.

  7. GST Waiver Available

    Purchasing a term insurance for NRI plan from an Indian insurance company allows you to get a GST waiver of up to 18%. This means you can easily save on your premiums if you make payments using NRE accounts supporting freely convertible currency.

  8. Additional Discounts

    The life term insurance for NRI policy in India provides an additional 5% discount on the premiums paid in annual modes. This, combined with the GST waiver, provides you with a 23% discount on premiums.

  9. Tax Benefits

    You can get tax benefits with term insurance for NRI plans in India. These plans provide tax advantages as per the Income Tax Act, 1961, under sections 80C and 10(10D).

What Are The Additional Benefits Of Term Life Insurance for NRIs in the USA?

Here are the additional benefits of term insurance for NRIs in the USA:

  • Accidental Death Benefits: NRIs in the USA can opt for the Accidental Death Benefit rider with their Term insurance for NRI plans, which offers additional coverage and extra protection if accidental death occurs.

  • Terminal Illness Benefits: Term Insurance for NRI plans provides coverage for terminal illnesses, offering lump sum payouts upon diagnosis.

  • Critical Illness Coverage: Term Insurance for NRI plans extends coverage for specific critical illnesses throughout the policy term, helping cover medical expenses for these conditions.

  • Premium Waiver on Disability: If an accidental total permanent disability leads to job loss during the policy term, this rider ensures that remaining premiums are waived, allowing you to maintain coverage.

How To Buy Term Insurance For NRIs Living in the USA From Policybazaar?

Here is how you can buy protection for expats from Indian insurers online from Policybazaar:

  • Step 1: Visit Policybazaar’s website and then go to Term insurance for NRI

  • Step 2: Fill in the basic details such as date of birth, name, contact details, and country code.

  • Step 3: Click on ‘View Plans’

  • Step 4: Answer the questions about smoking or chewing habits, annual income, occupation, education, and language.

  • Step 5: Choose the life term policy that suits your financial needs and proceed to pay.

Note: Know what is term insurance first and then buy a term plan for your loved ones.

What Are The Documents Required to Buy Term Insurance for NRIs in the USA?

Here is a list of documents required to buy life term insurance policy for NRIs in the USA from India:

  • Foreign Address Proof

  • Photo

  • Copy of Valid Visa

  • Passport front and back side

  • Last entry-exit stamp

  • Employment ID Proof

  • Last 6 months' bank statements and Last 3 Month salary slip


FAQs

  • Q: What is the accidental death cover in a term insurance for NRI policy?

    Ans: The accidental death cover in term insurance for NRI plan is an additional benefit that can be added to the base term plan in exchange for nominal premiums. With this rider, you can secure a larger amount for your nominee in case of accidental death.
  • Q: Who can buy term insurance for NRI in India?

    Ans: The following people are eligible to buy term insurance for NRIs in India:
    • NRIs (non-resident Indians)
    • OCIs (Overseas Citizenship of India) cardholders
    • PIOs (Persons of Indian origin)
    • Foreign Nationals
  • Q: What will happen to my life insurance term plan if I move to the USA?

    Ans: Your life insurance term plan will remain valid even if you move from India to the USA. However, it is better to inform the insurer about your move to ensure the inclusions and exclusions are not affected.
  • Q: What are the entry ages for a life term policy available for NRI in India?

    Ans: The entry age for a life term policy starts from 18 years and can go up to 65 years. The exact entry age for each term life insurance for NRI may be different depending on each specific plan's T&Cs.
  • Q: Can I take 2 term insurance for NRI plans in India?

    Ans: Yes, you can take 2 or more than 2 life term insurance for NRI plans in India depending on your human life value eligibility. This allows you to secure a large pure risk cover for your family in the event of your untimely death during the policy term.
  • Q: Can I Buy Term Insurance for NRI plan After Becoming a US Citizen?

    Ans: Yes, you can still purchase term insurance for NRI plan in India even after becoming a citizen of another country. However, you will need to provide your PIO or OCI card when buying the policy.
  • Q: How to Get a GST Waiver or Refund on Term 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 NRI. If you didn't opt for the waiver, you can still claim a GST refund by submitting the necessary documents.
  • Q: Can NRIs Make Payments in International Currency?

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

    Ans: Yes, NRIs can designate nominees residing outside India for their term insurance policies.
  • Q: Will Term Insurance for NRI Cover Nominees Who Change Countries?

    Ans: Yes, term insurance for NRI in India will still cover your nominee even if they change their country of residence.
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