Indians who reside outside India may want to purchase protection for expats to get pure risk cover in their home country. Luckily, the Foreign Exchange Management Act has allowed NRIs, i.e. Non-Resident Indians, OCIs, i.e. Overseas Citizenship of India cardholders, and PIOs, i.e. the Person of Indian Origin, to buy term plans in India. Various insurance companies offer customized options that are designed to fit the needs of NRIs. If you are an NRI and planning to buy a pocket-friendly term insurance plan, then you might want to learn more about how NRIs can buy term plans in India.
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Note: Know more about what is term insurance first before reading this article.
One of the important ways to secure the financial future of your loved ones is by purchasing term life insurance for NRIs. These protection plans provide a death benefit to the family of the policyholder in case of his/her untimely death during the policy term. The family can use this benefit amount to take care of their financial obligations like paying rent, child’s fees, and paying off loans and other obligations. Insurance companies offer a wide range of term insurance plans for NRIs that can help them protect the family’s financial needs in the absence of the policyholder.
Term Plans
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 reside 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 life term insurance policy, and there are two possible ways in which the same can be done.
An individual can purchase protection plans 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 term insurance for NRIs online from their current residential place at level term life insurance rates.
Here is a list of all the term insurance benefits of buying protection plans for pure risk cover in India:
Financial security: Term insurance for NRI plan offers death benefits in case of the policyholder’s untimely death during the policy tenure, to the nominee or family members. The family can use the payout benefit amount to take care of their financial needs and obligations.
Large life cover at affordable premiums: Protection plans for NRIs provide a large life cover at affordable premiums. With these pure risk cover plans, you can secure a sum assured up to Rs. 20 Crores for your family in your absence.
GST waiver: NRIs can get a GST waiver of 18% as per the government of India on the premiums paid using the NRE (Non-residential external) bank account in freely convertible currency.
Annual discounts: Term life insurance for NRIs offer an additional discount of 5% on the premiums paid in annual mode. This allows the NRIs to save a total of 23% on the premiums paid for their term insurance for expats.
Tele/video medicals: You can easily buy term plan for NRI from your current country of residence by scheduling tele or video medicals online. This way, you won’t have to travel all the way back to India just to get your medicals cleared.
Long term coverage: With term life insurance for NRI, you can get long term coverage, covering you till 99/100 years of age. These plans provide a guaranteed death benefit to your family members in case of your unforeseen death during the policy term.
Terminal illness and accidental death cover: Term insurance for NRIs allows you to get comprehensive protection for expats by including terminal illness and accidental death cover at nominal premiums. You should take a look at the policy T&Cs to see the available riders and their inclusions and exclusions.
Claim settlement ratio: In India, you can easily compare term insurance for NRIs offered by different insurers based on their CSR values. The CSR denotes the company’s claim settling abilities. Thus, you should always opt for a protection plan from an insurer with a high CSR of over 95% to ensure your family’s claim is settled in your absence.
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There are some conditions for an NRI to buy protection for expats in India. However, the eligibility conditions may vary from insurer to insurer, the basic requirements are almost the same.
| Parameters | Minimum | Maximum |
| Entry Age | 18 years | 65 years |
| Maturity Age | 23 years | 100 years |
| Policy Term | 5 years | 85 years |
| Sum Assured | 1 Crore | 20 Crores |
| Premium Payment Term | Regular, limited, and single pay | |
| Premium Payment Modes | Monthly, quarterly, semi-annual, and annual modes | |
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 level term life insurance rates applicable for NRI term insurance vary from company to company, depending on the T&Cs of the policy, the premium paying frequency, age, medical conditions, etc.
Low Entry Age: NRIs are eligible to buy term plans from the very early age of 18 years. Most insurers allow NRIs to buy protection for expats till the age of 65 years.
Policy Term – Term insurance for NRI usually has tenure from 5 years till 85 years with the option of getting coverage till 99/100 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. 1 Crore and Rs. 20 Crores.
Premium – The level term life insurance rates are almost 50-60% more affordable in India than international term life insurance plans. The premium rates offered by various insurers may be different for different countries.
Tax Benefits: You can claim term insurance tax benefits as per the prevailing tax laws under sections 80C and 10(10D) of the Income Tax Act of 1961.
The following documents are required to buy a term insurance policy for NRI:
Passport front and back
Valid visa copy
Foreign address proof
Employment ID proof
Last six month’s bank statement
Last three month’s salary slips
Photos
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 of buying a life insurance for NRI, make sure 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.
†Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
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