Should NRIs buy term life insurance in India?

The exciting and secured returns that the Indian investment market offers has always fascinated not only those residing in India but even those Indians staying outside the country – PIO, NRI or Expats. Collectively, the wide array of investment options that are available in India have remained the head-turner over the past couple of years.

The tech-enabled banking facility along with secured payments option and flexible country regulations is pushing investors to put their money in the Indian market. In addition, digital documentation including FATCA (Foreign Account Tax Compliance Act) and KYC/ video-based verification are some key components pushing investors to make the best use of their home country’s currency value.

As per guidelines issued by the Reserve Bank of India, premium amounts received from outside India through proper banking channels are valid and treated as ‘Freely Convertible Foreign Exchange’.

If you are an NRI and planning to buy a protection/term insurance plan, there is a pool of options available to choose from in India. In fact, in India prices of term plans are much cheaper in comparison to other countries in the world.

Another important point for individuals staying outside India to buy term insurance in India as they might be staying outside the country for work, business or education, but their family/nominees reside in India or may relocate to India in the future. God forbid, if something untoward were to happen to them, then their families in India will have to go through mental and financial stress.

In fact, when buying a term life insurance plan in India, you have trust and faith that the brand is available in your home country and your family will be able to handle the claim formalities within the country. With a term life insurance plan in India, you can financially secure the future of your loved ones and help them stay protected even when you are not around for a large cover amount like Rs 1 crore for a very small premium such as Rs 500 per month.

One of the easiest and most convenient ways for NRIs to buy term insurance in India is when they visit India. It is mostly possible for people who visit India at least once or twice a year. However, those who are not able to buy a policy when on a visit to India, they can buy it online through various portals. All that is required is to apply for the chosen term plan online.

Once the application is filled and the premium is paid online, the insurer may request you for a telemedical or physical medical as per your medical history apart from the necessary documents. While processing your application, the insurer may even consider the country you reside in and if the insurer finds that everything is in order, the application is accepted and a policy is issued to the customer.

Life insurance is unarguably one of the best ways to financially protect the future of your loved ones in case of your absence. Even if you are an NRI and reside outside India, it is important for you to buy a term insurance plan in India at the earliest, as the prices of term insurance plans in India are the cheapest across all other countries.

One must understand that the death of the breadwinner of the family can be a major setback for the dependents and to make sure that your family members live a decent life with peace, it is important to have a protection net in place.

The author is Head-Term Life Insurance at Policybazaar.com. Views expressed are that of the author.