NRI Life Insurance

What is Life Insurance for NRIs?

Life insurance for NRIs is specifically designed to offer financial protection to individuals of Indian origin living abroad. These policies ensure that in the unfortunate event of the policyholder's death, their family members—whether in India receive a financial payout, helping them maintain financial security.

Additionally, NRIs also get the option to customise their NRI insurance plans with various add-ons and riders. Opting for these may involve payment of an additional premium, however, these can provide additional financial protection to the policyholder and/or policy beneficiary in the case of events such as diagnosis of a terminal/critical illness, accidental death/dismemberment, etc.

There are many types of Life Insurances in India. The main one is Term Insurance (also called Term Plan).

How do Term Insurance for NRI plans work?

NRI Term Insurance functions similarly to standard term plans or life insurance plans in India. Please read more about Term Insurance & ULIP .

Benefits of Life Insurance for NRIs

Life Insurance offers NRIs several important benefits viz., thereby providing peace of mind and financial protection for them and their families:

1. Affordable Premiums: NRI Term insurance plans are more economical compared to many international options (~25% cheaper). So NRIs considering buying Life Insurance are better off to buy in India.

2. Global Coverage: Indian insurers offer life insurance to NRIs, ensuring their families are financially safeguarded regardless of their country of residence.

3. Tax Benefits: Premiums paid through NRE accounts are exempt from the standard 18% GST. Additionally, policyholders can claim tax deductions under Sections 80C and 10(10D) of the Indian Income Tax Act, 1961.

4. Flexible Payment Modes: Payments can be made using NRE, NRO, or FCNR accounts, offering flexibility to suit different financial arrangements.

Above are specific to NRIs. In general Life Insurance benefits include: Financial Security for dependents, Debt repayment, & Peace of mind. 

Who is eligible to buy NRI Term Insurance?

Term insurance is available to various categories of Indians living abroad who want to secure financial protection for their families. Eligible individuals include:

Non-Resident Indians (NRIs): Indian citizens residing outside India for work, studies, or other purposes. NRIs are eligible to purchase term insurance plans that provide life cover benefit to family members residing in India.

Persons of Indian Origin (PIOs): Individuals who hold foreign citizenship but have Indian roots. PIOs can also apply for term insurance in India to protect family members or manage financial responsibilities in India.

Overseas Citizens of India (OCIs): who hold OCI cards allowing them to live or work in India without full citizenship, can purchase term insurance policies that ensure financial security for family members residing in India.

Documents requirements for NRI Life Insurance:

1. An NRE/NRO account for premium payments.
2. A valid passport and visa as proof of identity and validating their NRI status.
3. OCI or PIO card for individuals who are Overseas Citizens of India or Persons of Indian Origin.
4. Proof of address, such as a utility bill or bank statement from their current country of residence.
5. Income proof, including salary slips, bank statements, or tax returns, to determine premium rates and eligibility.
6. Medical reports, if required by the insurer, depending on the applicant's age, health, and coverage amount.
7. Any other document asked by the insurer to furnish.

Note: this list of documents is illustrative and liable to change periodically based on insurer’s norms as well as on a case by case basis with respect to applicants.

How to buy NRI Life Insurance?

1. You can visit any Intermediary or Authorised agent or Visit insurer's official website to assist you with the NRI term plan purchase.
2. Provide your personal details (name and date of birth) along with your contact details and annual income in the online application form available on the website.
3. Provide your nicotine/tobacco intake, gender, education and occupation.
4. Select your desired life coverage amount, tenure and premium payment frequency.
5. Choose the best Life insurance interms of Affordability, Brand Reputation, Riders, Brand Longevity. 
6. Next, add Riders /Add-ons to the policy.
7. Review the policy summary and proceed with paying the first premium in full.
8. Once you make the payment, you will receive the confirmation from the Insurance.
9. After this, you will be contacted by the Insurance company's representative / Insurance Intermediary representative who will assist you in submission of all the necessary documents.
10. If required, the insurance might ask you to go through few medical tests. (depends on the Insurer)
11. Upon successful verification of these documents and medical test details (Under writing process), the company shall release your policy document and your NRI term insurance policy will be issued.

Conclusion:

NRI Term Insurance is a vital financial protection tool for the Non-Resident Indians as well as the PIOs/OCIs residing in the foreign countries and seeking to protect their families residing in India. With various plan options tailored to different needs, NRIs can find the right coverage that fits their financial situation.

By securing a NRI Term Insurance policy, NRIs can ensure their loved ones are protected financially, providing peace of mind regardless of where they reside.

Regards,

Honvest Team.

 FAQs

What are the requirements to apply for life insurance?

Requirements for NRIs are similar to those for Indian citizens. NRIs need to submit a copy of their age proof, address proof, identity proof, passport, medical history, income proof, etc. for KYC purposes. If NRIs provide a valid Form 10F and Tax Residency Certificate (TRC) then there will be no deduction of Tax at Source (TDS).

Can NRIs pay premiums in foreign currency?

Yes, NRIs can make premium payments in a foreign currency.

Is a medical examination required for NRIs buying life insurance in India?

Mostly yes, a medical examination is required to purchase life insurance in India. However, NRIs can choose to get the test done in their country of residence and then share the reports with the insurance company in India.