If we look through the 80s and 90s, people went abroad to earn for their families and get back to India to lead a stress-free life in finance. And, if you look at today’s trend, kids move abroad to pursue their higher studies, and as they live there for a few years, they gradually wish to settle there and pave the way for them to be a Non-Resident Indian (NRI).
Even though you become an NRI, your love and tendency to safeguard your family in India stays constant. It is where life insurance comes to the rescue that can help you take off some load from your shoulders.
But, can NRIs buy term insurance in India? Are they authorized to practice such a deed?
This blog is to answer queries such as,
- Can NRI Buy Term Insurance in India?
- What are the factors that NRIs should consider while buying life insurance?
- What all insurance companies provide the NRI with life insurances?
If you are a non-resident Indian and want to prepare a monetary haven for your loved ones back in India, then continue to read as we shall provide the suitable measures to accomplish your goal via life insurance.
Can NRI Buy Term Insurance in India?
And the answer to this query is YES. A non-resident Indian (NRI) has the right to purchase life insurance in India, be it ex-pats and Person of Indian Origin (PIO). Such a deed is happening due to the Foreign Exchange Management Act that helps the Indian-based foreign souls practice such an act.
Many insurance companies make it happen for the NRIs. It comes with a load of benefits and has certain checks and balances that one must look through before obtaining life insurance in India while sitting in a foreign land.
After validating that an NRI can apply for life insurance in India, it is time to step down to the nitty-gritty and learn about the prerequisites for applying for life insurance.
The requirements stand almost similar for the NRIs and the Indian citizens residing in the country. To begin with, to fulfill the KYC procedures, NRIs must produce:
- Copy of their age evidence
- Identity Proof
- Address proof
- Medical History (to check the level of risk if having any ailment)
- Income proof
And some other documents. Moreover, the NRIs are blessed from being taxed on the source and free from the deduction if the concerned presents a valid Form 10F and Tax Residency Certificate (TRC).
Let us step onto the premium payment methods accessible to non-resident Indians (NRI).
They can use their respective bank’s credit or debit card to pay in the country’s currency in which they are presently residing. However, they can also pay using their Non-Resident Ordinary (NRO) and Non-Resident Savings Accounts (NRSA).
The availability of technology-enabled financial services, safe payment options, and flexible country legislation encourage NRI investors to engage in the Indian industry. Furthermore, digital paperwork, such as FATCA (Foreign Account Tax Compliance Act) and KYC or video-based authentication, are crucial components encouraging investors to produce the ultimate value of their home nation’s currency.
According to Reserve Bank of India (RBI) regulations, premiums acquired from abroad via legitimate financial services are valid and classified as ‘Freely Convertible Foreign Exchange.’ And above all, the term plan pricing in India is far low compared to other countries. So, don’t you want to invest your money in a cost-effective place?
What are the Terms and Conditions for NRI to Purchase Life Insurance?
Choose the Righ Insurance Company: Not every insurance company can provide an insurance plan for the NRI, or are they NRI friendly. Therefore, it is crucial to locate a reputable insurer. To know an insurer and their plans undergo the features and perks of the plan. Whenever you try to map an insurance plan, keep your requirements and the ultimate goal from the plan you are purchasing. Also, don’t forget to check through the claim history.
Price of the Chosen Policy: Before purchasing an insurance plan, NRIs should conduct thorough research to understand the plan in a detailed manner in liaison with their list of needs and requirements. They should evaluate policy costs by determining whether purchasing a policy in their native nation or abroad is cheaper.
Need for Medical Test: Just like the citizens residing in India have to undergo a series of medical tests that can give a green card to purchase a life insurance policy in India, the same clause goes for the NRIs. And, if they are buying the policy in India, they will not be required to pay any additional medical examination fees.
Tax Benefits: When you get term insurance in India, you gain several tax advantages as mentioned under Sections 80C and 10(10D) of the Income Tax Act, 1961. However, the NRIs would be expected to pay the taxes if they would not have filled out Form 10F and Tax Residency Certificate (TRC).
Meet the Eligibility Criteria: If the NRI has had an Indian passport.
The individual is a spouse of an Indian citizen or individual mentioned in sections 1 or 2 of the Citizenship Act (1955) or has family roots (grandparents) from India. If you have these, none can stop you from obtaining insurance in India.
These were the factors/elements that an NRI should consider before purchasing insurance rather than hitting a blind shot.
Insurers Who Offer Life Insurance for NRI
Aditya Birla Sun Life insurance
Want to have a reliable partner safeguarding your family in India or invest your money in the right plan? Then get a plan by the Aditya Birla Sun Life Insurance group. It can be counted as one of the best in the market as it is established and offers a comprehensive plan that will provide one-of-a-kind solutions to ensure their absence from their family does not jeopardize one’s goals.
Be it retirement, education, saving, investment, life coverage, health, critical illness, cancer protection, you name it, and they have it.
If we had to suggest one, we would suggest ABSLI Vision LifeIncome Plan for the NRIs to help them plan their financial goals while also delivering a consistent income and entire life cover. This plan allows the NRI to customize it with benefits that come at a pocket-friendly cost, death benefit, survival, maturity, and death benefit.
Max Life Insurance
It is next in our line for the NRIs as it comes with a plethora of options and has a good set of parks such as tax benefits, monthly income benefit that provides a death benefit, and monthly income perks for ten years. Moreover, they also come with riders that help make your plan more comprehensive and inclusive.
Owning a plan in India by an NRI is not a problem, but if you hang onto a wrong plan, it might pose a threat to your level of security and ROI as you have expected it to be at the time of purchase. Therefore, always go for a plan that comes from a reliable insurer and a cost-effective because every penny counts.