The Indian diaspora is a large community and an important economic contributor in many countries worldwide. NRIs (Non-Resident Indians) can still carry out several functions in their home country and that includes insuring their life with a term insurance policy. NRIs, who wish to, can buy term insurance in India.
An NRI can purchase good term insurance coverage in two simple ways. While on a trip to India, the person can buy insurance. The entire process is straightforward and carried out the same way as for an Indian citizen.
The terms and conditions of term insurance policies for NRIs are adjustable, and the main corpus (sum assured) can be as high as Rs 1 Crore. The applicable premiums vary according to the insurance terms, how frequently they are paid, the policyholder’s age, health, and other factors.
The length of the tenure can be likewise flexible, ranging from 6 months to 25-30 years. A person must be between 18 and 60 to purchase the plan (although some policies may have an upper age capping of 55 years). The policyholder must have an account with one of the designated banks to pay premiums online.
How do I get term life insurance as an NRI?
Two options are available when looking to buy term insurance for an NRI. They can purchase a term plan from their home country or while visiting India.
1. In India
Buying a term plan for NRIs in India is simple and quick. The NRI only needs to choose a preferred insurer and request to buy the policy. NRIs must, however, indicate where they live. Most insurance providers maintain a list of nations where they do not offer insurance. Additionally, the NRI might be charged a more significant premium if they reside in a region with political unrest.
2. From the origin country
The process to buy term insurance for an NRI from abroad can be a difficult process. As part of the process, a notary public and an Indian diplomat must check on the NRI. Students from India who study abroad can ask their dean or supervisor for help with the verification process.
NRIs can also enjoy term insurance tax benefits if they meet the terms and conditions required.
What are the terms of the policy and coverage?
1. Policy duration
NRIs who purchase term life insurance must also choose their tenure. NRIs have a choice of policy terms that range from 6 months to 25 years. Today, most insurers also provide NRIs with whole life insurance coverage.
2. Coverage
When getting term insurance for NRI, one can choose the level of coverage or the amount of money they want to be covered for. It’s essential to select a suitable sum for your nominee. You must ensure that the payoff is enough to cover any debts they still owe or certain future obligations.
Features of NRI term plans
1. Numerous policy term options
These policies’ terms can range from six months to 25-30 years in length. For NRIs to be able to acquire insurance, they must be at least 18 years old. In most circumstances, people older than 60 or 65 may not get a term plan.
2. High sum assured amounts
The sum insured is the most crucial factor regarding term insurance plans since it helps you provide financial assistance to your loved ones in your absence. Some insurance companies do not have a maximum insured amount cap so, depending on the needs of your family’s finances, you can choose the highest possible amount.
3. Easy payments
Insurance companies accept payments made through internet banking to enable NRIs to maintain their policies even while they are outside of India. They can also use their NRO, NRE, or FCNR accounts or international remittances to pay their regular premiums.
4. Medical documentation
NRIs must submit documents about their prior medical histories while acquiring term insurance products. The insurance company may use these facts to determine the maximum rate it can charge.
Other documents needed for NRI term insurance purchase –
- Properly completed application
- Copies of the applicant’s passport’s front and back
- Income evidence
- Evidence of age
- Residence evidence
- If applicable, copies of medical records
- Foreign Account Tax Compliance Act (FACTA) form
NRIs must also have proper documentation to obtain the appropriate term insurance tax benefits.
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.
Tax benefit is subject to change in prevalent tax laws.