How Non-Resident Indians Can Buy Term Life Insurance In India


Non-Resident Indians (NRIs) and People of Indian Origin (PIO) can also purchase these policies in India. Vinay Taluja, Product Manager, Bajaj Capital, said: “The Foreign Exchange Management Act has enabled NRIs and PIOs to obtain term insurance in India. In addition, an NRI does not need to be present in India when purchasing term insurance.

Rakesh Goyal, director of Probus Insurance, said it’s always best to buy when NRIs are in India. However, they can also buy term policies when they are in a foreign country.

“There are two points that policyholders should keep in mind when paying their premiums. Suppose the policy is issued to NRIs in foreign currency, they will have to pay premiums from a non-residential external account (NRE) or non-resident foreign currency account (FCNR) held in India. But if the term insurance policy is issued in Indian currency, the premiums can be paid through a non-resident ordinary account (NRO), ”Goyal said.

The payment of the life insurance premium is tax deductible under Article 80 C if the sum insured is at least 10 times the annual premium. Generally, term insurance policies meet this requirement.

Therefore, an NRI subject to tax in India can also benefit from the insurance premium tax deduction and claim the same in their returns.

In addition, premiums may vary from country to country. If the NRI stays in a country with higher life risks, or if the country is more prone to civil trouble and has an unstable government, the premiums for those countries would be higher than those for other low risk countries.

Ways to buy

When NRIs visit India, they can easily purchase term insurance. In a scenario where an NRI visits India at least once or twice a year, they are more likely to do so. However, those who are unable to purchase a policy while visiting India can do so online. All you have to do is complete an online application for the term insurance of your choice.

The documents required for NRIs to purchase term insurance are an application form, a copy of the (attested) passport and documents specifying health conditions / check reports, age certificate and proof of income documents.

After completing the proposal / request form and paying the premium online, the insurer may request a telemedical or physical examination based on your medical history, in addition to the required documentation. The insurer may take into account the country in which you live when processing your claim. If everything is in order, the request is accepted and a policy is issued to the purchaser.

Death benefit

The process is straightforward as the candidate must submit the necessary documents in accordance with the terms of the policy. Once the claim documents are filed in India, the insurer processes the claim regardless of the country of death. Goyal said: “If the policyholder bought a policy in India, the claim would be payable in rupees and if it was purchased in a foreign country, the proceeds would be paid in foreign currency.”

To add to this, Rushabh Gandhi, Deputy Managing Director of IndiaFirst Life Insurance Co. Ltd, said: “Completing the claims process for applicants (if they reside in India) becomes easier for an insurance policy. Indian insurance. In addition, the death benefit paid to a candidate continues to be tax exempt in India. “

Reasons to buy

If you are an NRI and looking to purchase term protection / insurance in India, there are a number of options to choose from.

Sajja Praveen Chowdary, Head of Term Life Insurance at Policybazaar.com, said: “In reality, compared to other countries, the prices of term insurance policies in India are much lower. Another main reason that people living outside India can purchase term insurance in India is because their family / applicants may live in India or move to India in the future. If anything unfortunate happened to them, their families in India would be strained mentally and financially. “

“When an NRI purchases term life insurance in India, they are confident that the insurer will be available in their home country and their family will be able to handle the claims processes there,” he said. -he adds.

Echoing similar views, Taluja said, “If you are an NRI and reside outside of India, it is important that you purchase term insurance in India at the earliest, as policy prices for Term insurance in India are the cheapest of all other countries. In addition, it is also essential to recognize that the loss of breadwinner can be a serious setback for dependents. Therefore, an NRI should help them stay covered by purchasing term insurance in India. “

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