Life is full of uncertainties and everyone wants to secure their family and their children’s future. NRIs are no different & they can also avail of NRI Term Insurance Plan in India.

NRI Term Insurance Plan secures the future of your loved ones. Every Indian citizen and NRI is also eligible for this protection.

Term insurance is a type of insurance that provides coverage for a specific period or years or “term”. It provides a financial benefit to the nominee in case of an unfortunate demise of the insured during the policy term. We have written a great details on this topic. You can read it here.

NRIs get confused about whether they should take an insurance policy in India or in city/country of residence. What about NRI Term Insurance Plan, if bought in India while you were a resident?

Let’s clear these doubts today.

Features of the NRI Term Insurance Plan

Wide Policy Term Choice: Many Insurance providers offer a wide range of term of the policy, such as short or long or according to different age groups.

Customizable Amounts: Insurance providers provide you with a policy as per your choice and you can also increase your policy value after calculating premium.

NRI can opt for an amount as low as INR 2 Lakh or as high as 5 Crores.

Easy payment: As NRIs are not living in India permanently so insurance companies also accept payments via online or internet banking apart from this NRIs can also choose how often they would like to make premium payments.

NRI can also pay premiums of NRI Term Insurance Plan from their NRO, NRE, or FCNR accounts.

Quick documentation: NRI applying for Term insurance need to fill very few formalities with less documentation and a very easy and quick process.

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NO GST is levied on Term Plan if taken by NRI. This reduces premiums by 18-20%.

Medicals in most cases can be telephonic. So you do not need to be in India at the time of purchase.

Term Plans in India are less costly as compared to Foreign Insurers.

It does not matter if death occurs outside India. The claim can be filled subject to documentation on death certificates, reports, funeral and embalming rules.

NRIs can purchase term insurance in two ways. They can either procure a term plan while visiting India or from the country of their residence

While in India – Buying NRI Term Insurance Plan

Purchasing a term plan in India is a quick and easy process.

Just go to any insurance company or agents or advisors and ask for a quotation.

An NRI needs to disclose the country of residence and have to fill some formalities and then the policy is considered as a regular term plan purchased by Indian citizens.

NRI Term Insurance Plan From the Country of Residence

Purchasing an NRI Term Plan insurance policy from abroad is slightly complicated. But it can be done online and documents can be filled electronically.

Medicals can be done at a clinic/hospital nearby or over the phone.

The required documents for purchasing NRI Term Plan

Passport copy
The form of proposal/ application form
Documents specifying the health conditions/ check-up reports
Age proof
Income proofs
Residence proof
An amount (equal to the first calculated premium) also needs to be paid
Foreign Account Tax Compliance Act (FATCA) form
NRI Questionnaire in some cases

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Should an NRI Buy Term Plans in India

Yes, NRIs should buy term plans in India. There are many reasons to do so. Here are some benefits:

In India, the policies and regulations are not that much complicated and the process is very quick and easy with less documentation and cost-effectiveness.

The cost or premium can be 40 to 60% less in India compared with plans in the country of residence. We have done a study of plans available in the UK, Singapore & UAE. These were very costly.

The term plans will be beneficial for family members in case you live abroad. They can claim in case of your unfortunate demise. It is also beneficial when you decide to return to India after some years as the moment your age grows it is the term plan approval is costly & difficult.

An NRI can customize & buy a term plan as per his/her needs and requirements. Indian companies provide many options & riders to complement your term plan.

The NRI Term Plan in India also comes with Tele Medicals in most cases if the person is healthy & at a young age.

NRIs can also purchase Term Plan from abroad. Companies do not insist that you travel to India for this. Most companies deal entire process online and provide sufficient digital support.

NRIs if filing returns in India can take benefit from Tax Deductions under section 80C of the IT Act. The limit for this is INR 1.5 Lakh each year. Also as per Section 10 (10D), the proceeds or claim money is tax-free in India.

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Also, note in an unfortunate case of demise the claim money will not attract any TDS or TCS. The money is also freely repatriable. form 10F or TRC is not required.

One issue to note as we experienced this with one of our client – In some cases where a physical medical examination was required the cost was borne by the policy holder. In India, this cost is borne by the company.

Another issue could be the geo-political environment of the country you reside may increase the premium or deny the policy. For eg currently, if you are in Sudan or Ukraine, the chances of getting a policy approved are less.

So send us a message if you have more questions or email me madhupam at the rate thewealthwisher.com