Life Insurance
Investment
2024-05-14 5 Min read
0
Term insurance is a necessary component of planning and provides protection from the unexpected. For Non-Resident Indians (NRIs), investing in term insurance in India offers a safety net for their families and ensures that unplanned events do not put a brake on their financial goals. But buying term insurance in India may sound daunting.
This blog simplifies the process and outlines what NRIs should do to secure term insurance.
Secure Your Future: Understanding Term Insurance
Term insurance is simply life insurance, which pays out at a set price for a set length of time. If the insured dies during the term, the death benefit is paid to the nominees – an important family investment. For NRIs, term insurance in India appeals because it is affordable and it covers their dependents in India.
Eligibility Criteria for NRIs
Eligibility criteria for NRIs buying term insurance in India are flexible. NRIs and Persons of Indian Origin (PIOs) apply along with Overseas Citizenship of India (OCI) cardholders. However, the procedure for applying for and approving a policy differs somewhat based on residence status, gender, income, and health condition.
Choosing the Right Policy
NRIs buying term insurance in India should first determine the coverage amount, term length, premium payment flexibility, and additional riders. Comparing policies from various insurance companies can make locating the right policy at the right price tough. Online insurance comparison tools may help with that.
Required Documents
The documentation process for NRIs is straightforward but involves some special paperwork:
● Identity Proof: A copy of the passport is needed to confirm the identity of the NRI.
● Address Proof: Attested documents attesting to the NRI’s overseas residential address.
● Income Proof: The income level may be determined by the NRI with recent pay slips, income tax returns, or an employment letter.
● Medical Records: The risk and the premium may require medical examinations depending on the policy and the insurer.
● Identity Proof: A copy of the passport is needed to confirm the identity of the NRI.
● Address Proof: Attested documents attesting to the NRI’s overseas residential address.
● Income Proof: The income level may be determined by the NRI with recent pay slips, income tax returns, or an employment letter.
● Medical Records: The risk and the premium may require medical examinations depending on the policy and the insurer.
Application Process
Online or offline NRIs can apply for term insurance in India. For offline applications, NRIs may apply during their visit to India or by mail/courier if abroad. Online applications make it easier for NRIs to apply, submit documents, and even have medical examinations in their country of residence.
Premium Payments and Currency
The NRIs pay the premium in Indian rupees or foreign currency. However, the claim amount can also be repatriated if the premium is paid in foreign currency. The premium payment method may also affect how quickly the death benefit crosses the border.
Regulatory Framework
The Insurance Regulatory and Development Authority of India (IRDAI) released guidelines to NRIs regarding buying term insurance in India. Knowledge of such regulations and of claim settlement in cross-border scenarios is recommended.
Key Factors to Consider When Choosing a Term Insurance Plan for NRIs
When selecting a term insurance plan, NRIs should consider the following factors:
● Sum Assured: Determine the coverage amount needed to secure your family’s financial needs adequately.
● Premium Payment Flexibility: Look for plans that allow premium payments with some flexibility (such as currency), which may be helpful for NRIs.
● Policy Tenure: Pick a tenure that best fits your long-term financial and retirement goals.
● Rider Options: Consider adding rider benefits like critical illness, accidental death and disability.
● Claim Settlement Ratio: Research the insurer’s Claim Settlement Ratio (how likely your claim is to be honored).
● Sum Assured: Determine the coverage amount needed to secure your family’s financial needs adequately.
● Premium Payment Flexibility: Look for plans that allow premium payments with some flexibility (such as currency), which may be helpful for NRIs.
● Policy Tenure: Pick a tenure that best fits your long-term financial and retirement goals.
● Rider Options: Consider adding rider benefits like critical illness, accidental death and disability.
● Claim Settlement Ratio: Research the insurer’s Claim Settlement Ratio (how likely your claim is to be honored).
Conclusion
For NRIs, buying term insurance in India is a smart move to secure their family financially – even thousands of miles away. The process is straightforward but requires thoughtful consideration of eligibility, documentation, policy features, and tax implications. With this blog, NRIs can find the right term insurance plan for themselves and plan their finances cross-border.
Frequently Asked Questions
Q: Can NRIs buy term insurance overseas?
A: Yes, NRIs can buy term insurance from abroad using online applications or through a delegated family member or advisor in India.
Q: But is a medical check-up compulsory for NRIs buying term insurance in India?
A: Not always, depending on the insurer’s policy, applicant’s age, and assured amount.
Q: Are the nominees non-residents?
A: No, the nominees can be non-residents. But additional documentation or procedures are part of claim settlement.
A: Yes, NRIs can buy term insurance from abroad using online applications or through a delegated family member or advisor in India.
Q: But is a medical check-up compulsory for NRIs buying term insurance in India?
A: Not always, depending on the insurer’s policy, applicant’s age, and assured amount.
Q: Are the nominees non-residents?
A: No, the nominees can be non-residents. But additional documentation or procedures are part of claim settlement.
Disclaimer
Star Union Dai-ichi Life Insurance Company Limited IRDAI Regn. No: 142 | CIN: U66010MH2007PLC174472
Registered Office: 11th Floor, Vishwaroop I.T. Park, Plot No. 34, 35 & 38, Sector 30A of IIP, Vashi, Navi Mumbai – 400 703 | Contact No: +91 22 7196 6200 | 1800 266 8833 (Toll Free) | Timing: 9:00 am – 7:00 pm (Mon – Sat)| Email ID: customercare@sudlife.in | Visit: www.sudlife.in | For more details on risk factors, terms and conditions, please refer to the sales brochure carefully, before concluding the sale. |Trade-logo displayed belongs to M/s Bank of India, M/s Union Bank of India and M/s Dai-ichi Life International Holdings LLC and are being used by Star Union Dai-ichi Life Insurance Co. Ltd. under license.
Registered Office: 11th Floor, Vishwaroop I.T. Park, Plot No. 34, 35 & 38, Sector 30A of IIP, Vashi, Navi Mumbai – 400 703 | Contact No: +91 22 7196 6200 | 1800 266 8833 (Toll Free) | Timing: 9:00 am – 7:00 pm (Mon – Sat)| Email ID: customercare@sudlife.in | Visit: www.sudlife.in | For more details on risk factors, terms and conditions, please refer to the sales brochure carefully, before concluding the sale. |Trade-logo displayed belongs to M/s Bank of India, M/s Union Bank of India and M/s Dai-ichi Life International Holdings LLC and are being used by Star Union Dai-ichi Life Insurance Co. Ltd. under license.
Beware of spurious or fraud phone calls
IRDAI is not involved in activities like selling insurance policies, announcing bonus or investment of premiums. Public receiving such phone calls are requested to lodge a police complaint
