When you are far away from your family, you have two things in your heart: pride in creating a life outside the country and concern for the near ones in your native place. You might be sending money to them every month, supporting them with major expenses, and doing everything for them. But life is uncertain. What if something untoward happens to you? How will they survive?
That’s where term insurance comes into the picture. It’s a guarantee that even if you won’t be there tomorrow, your loved ones will still have the funds they need to live with dignity. And the best part is, even if you are an NRI, you can purchase term insurance from India without too much hassle.
In this blog, we will simplify everything for you. We will break it down and explain:
- What term insurance entails for NRIs
- The regulations you must comply with
- The advantages that you can benefit from
- The expenses incurred
- Steps for purchasing the appropriate plan
By the end of it, you’ll be well aware of how to safeguard your family’s future while working abroad.
What Is Term Insurance for NRIs?
Term insurance for NRIs is the cheapest and most basic type of life insurance. You pay a one-time sum each year (known as a premium) to an insurer. In exchange, they agree to pay your loved ones a large amount of money (known as the sum assured) if you die within the policy term.
For the NRIs, it is the same as for those residing in India. The difference is only in applying, submitting documents, and sometimes the medical tests taken. NRI term insurance is specifically for Indians abroad, People of Indian Origin (PIOs), and Overseas Citizens of India (OCIs) who wish to cover their family in the event of an untimely demise.
How can NRIs Purchase Term Insurance in India?
It is easier to purchase term insurance from India if you live outside India compared to many imagining. You can apply during your visit to India, or even from your home country.
Following is how it typically goes about:
- Select a policy – Compare various plans of insurance and pick the one that fits your requirement.
- Fill the application – Most of them permit you to apply online.
- Submit papers – You will most likely require your passport, visa, proof of residence (India or foreign), and income proof.
- Medical exams – You can get them conducted in India or in your home country.
- Pay the premium – You can pay from NRE/NRO accounts or at times directly from an international bank account.
Tip: Use a term insurance premium calculator before you apply. It’s an internet-based tool which informs you of the amount you will need to pay for your preferred cover. This ensures that you pick a plan that is not only cost-effective but also adequate for your family’s requirements. Whether you need ₹1 crore or more, a calculator simplifies your decision.
Rules for NRIs Purchasing Term Insurance in India
Some of the most important rules to bear in mind are:
- Eligibility – You have to be an Indian living abroad, a PIO, or an OCI.
- Age limit – Generally between 18 and 65 years, as determined by the insurance company.
- Medical check-up – Most of the time, necessary before the policy is issued.
- Payment method – Premiums can be paid using NRE/NRO bank accounts or occasionally in foreign currency.
- Global claim settlement – Even if the policyholder dies abroad, the claim may be settled in India, as long as the cause of death is covered.
Advantages of Purchasing Term Insurance in India as an NRI
There are numerous reasons why NRIs prefer to purchase term insurance from India:
- Reduced Premiums: Indian term insurance policies tend to have cheaper premiums than policies in most foreign nations.
- Huge Coverage Options: You get to select high coverage levels, even as much as ₹5 crore or more, at affordable prices.
- Global Protection: The majority of Indian term insurance policies provide global cover, so your family is covered wherever you are residing.
- Tax Advantage: If you earn taxable income in India, the premiums that you pay could be claimed as deductions under Section 80C of the Income Tax Act.
- Simple Claim Procedure for Indian Families: If your family resides in India, purchasing from an Indian insurer facilitates the process of their claiming the sum assured.
Indian Term Insurance Pricing
The price of a term plan varies based on a few factors:
- Your age – Decreasing age means lower premiums.
- Health – People in better health receive lower rates.
- Coverage amount – The larger the coverage, the more the premium.
- Policy term – The longer the term, the higher the cost.
- Smoking status – Smokers will pay a higher premium compared to non-smokers.
Example: A healthy 30-year-old NRI purchasing a ₹1 crore policy for 30 years might pay between ₹7,000–₹12,000 per annum. This can go higher if you are older or have medical ailments.
Steps to Buy the Right Plan
Here’s a checklist to help make it simpler:
- Decide the coverage amount – Consider your family’s monthly expenditure, loans, and future needs.
- Use a term insurance premium calculator – Find out how much coverage you can afford.
- Compare insurers – Check claim settlement ratios and customer reviews.
- Check NRI-specific rules – Some insurers don’t issue policies to residents of some countries.
- Read the fine print – Check exclusions and conditions before purchasing.
- Prepare documents – Passport, visa, proof of income, and medical reports.
Common Questions NRIs Have
Q1: Can I purchase a policy without coming to India?
Yes. Most companies permit you to apply online and undergo medical tests in your home country.
Q2: How do I pay the premium outside India?
You can use NRE/NRO accounts or occasionally an international bank transfer.
Q3: Is death abroad covered by the policy?
Yes, most plans cover. But always refer to the list of exclusions.
Q4: Would my premium increase if I shift to a different country?
Not typically, but you must notify your insurer of your change of address.
Mistakes to Avoid
- Failure to indicate your country of residence – You may have claims denied.
- Picking reduced coverage to cut costs – Your loved ones could suffer in the future.
- Ignoring the fine print – Certain risks, such as deaths in war, are not covered in some policies.
- Delaying purchase – The sooner you purchase, the less expensive your premium will be.
Conclusion
Living outside the country makes you away from family, but your responsibility and love for them never end. An NRI plan purchased in India through a term insurance is a great means of providing their security and financial well-being.
It’s cheap, provides global coverage, and is easy to purchase as long as you play by the rules. A term insurance premium calculator can assist in finding easily the suitable balance between costs and protection.
Ultimately, term insurance is a product as much as it is a guarantee that no matter where you are on this earth, your family will always be able to rely on getting by.
