Should NRIs Purchase Life Insurance In India? Explained

When life takes you across borders, planning for the future can get a little tricky. At some point, the question of whether to purchase life insurance in India may come up for Non-Resident Indians (NRIs). But why is this seen as such a big deal? Are you struggling to balance your new life overseas with your native nation and wondering how to care for your family's future? Lilly's life is one such example. A fantastic career opportunity brought her to the United States a few years ago. Despite her busy schedule of starting a new life, she still worries about her family's safety in India. Lilly was uncertain about whether her life insurance policy would provide greater peace of mind. The idea is to be able to safeguard your family members with coverage tailored to your particular circumstances. But are you sure if this is the best option for you? Let’s find out why life insurance in India is a wise choice for protecting your family's future.

Can NRIs Purchase Life Insurance Plans In India?

Non-resident Indians (NRIs) can definitely purchase life insurance policies in India. The good news is that several Indian insurers have made special life insurance policies just for Indians who don't reside in India. But who qualifies as an NRI? An NRI represents an Indian citizen by birth who has spent a particular period of time living abroad. You will be able to get life insurance in India if you have an Indian passport. Now, let's look at the legal framework that makes it possible. Foreign nationals (NRIs) can make investments in a number of financial products in India, including life insurance contracts, under the Foreign Exchange Management Act (FEMA). These plans are intended to cover the financial needs of your dependents regardless of where you currently reside. This means that living outside of India does not hinder your ability to obtain life insurance coverage within the country. Also, people from any country other than Bangladesh or Pakistan who hold an Overseas Citizenship of India (OCI) or Person of Indian Origin (PIO) card are eligible to purchase life insurance in India.

Should NRI Be Present In India When Buying Life Insurance?

No, life insurance for NRI does not require the person to be present in India. The good news is that acquiring life insurance policies from overseas is not difficult. Many insurance companies in India have embraced technology, providing agent services and online platforms that make it easy for non-resident Indians (NRIs) to apply for and manage their policies from any location in the world. It is thus entirely up to you whether you would rather handle things remotely through phone or video consultations or whether you would rather travel to India to personally confer with financial experts and insurance companies. Because of this flexibility, you can maintain your international lifestyle while receiving the necessary financial safety. However, be aware that purchasing insurance abroad may require scheduling, financing, and forwarding the findings of medical testing to your insurer in India. And this could result in additional expenses. Although some insurers are expanding globally, others are still in the process of opening international offices to assist with paperwork and legalities.

How Can Premiums Of Life Insurance Policy Be Paid?

Due to the various options available, paying premiums for life insurance for NRI is simple. Indian insurers offer a number of practical ways for customers to pay their premiums, and they include -

• Non-Resident Ordinary (NRO) Account
• Non-Resident External (NRE) Account
• Foreign Currency Non-Repatriable (FCNR) Account But first, confirm the currency in which your policy was issued. If your life insurance policy is valued in a foreign currency, you must fund the premiums using an NRE or FCNR account. However, if your policy was issued in Indian rupees, you should use an NRO account to pay your premiums. This means that it's very simple to manage your life insurance premiums from overseas when you have these convenient payment choices.

What Are The Eligibility Criteria For NRIs To Purchase Life Insurance In India?

Here's a brief overview of all that you should know - First off, with a few small exceptions, NRIs and Indian citizens have similar requirements for purchasing life insurance. ➔ Age Requirements: Depending on the insurance you select, the age restrictions may change. Therefore, it's a good idea to review the plan's details if you're interested in buying it. ➔ Indian Passport: Life insurance for NRIs in India requires the person to have a valid Indian passport. ➔ Residency Status: You'll need to provide proof of your NRI status. For this purpose, you can use a valid Indian passport, visa, or work permit. Additionally, PIO/OCI cardholders are also eligible for life insurance. ➔ Health Check-Up: A medical examination may be necessary, depending on the sum assured and your health condition. This can either be set up by in-person assessments in India or online consultations conducted outside. ➔ KYC Documentation: Ensure that you are prepared with the necessary paperwork, such as identification, residence, and age verification. Also, you might have to submit documentation of your income, such as pay stubs, tax returns, or bank statements. ➔ Payment Source: NRE, NRO, or FCNR accounts are the proper methods to make premium payments. Remember that insurers may impose additional requirements based on the particular plan you select. Will The Country Of Residence Affect The NRI’s Premium Amount? Let's find out whether living in a different nation affects your life insurance premiums as an NRI - When buying life insurance for NRI, you can see that their premiums are similar to those of natives. However, your premium amount may vary according to the nation in which you reside.

• Country Of Residency: Insurers consider several aspects of your present country of residency when assessing your risk profile, including health concerns, economic conditions, and political stability. For instance, your premium may be higher if you reside in a high-risk location because of factors like political unrest, disease outbreaks, or conflict. Furthermore, country-specific risks like mortality rates and common health dangers can affect your premium.
• Currency Fluctuations: Due to changes in exchange rates, payments made in foreign currencies may potentially have an impact on premium amounts. Plus, the regulatory framework in your country of residence may influence the manner in which your premium is determined. Therefore, even while costs are usually in line with residents', the particulars of your location may have an impact on them.

Is It Beneficial For An NRI To Buy Life Insurance In India?

This is why NRIs buying life insurance might be a wise decision - ➔ Cost-Effectiveness: When compared to insurance plans from many other nations, Indian insurance policies are often more affordable. ➔ Global Coverage: Because these insurance provide worldwide coverage, your location has no impact on the level of financial protection you enjoy. This means that you're insured whether you're back in India or overseas. ➔ Investment Opportunities: Investment-linked plans are included with a few Indian life insurance policies. This makes it possible for NRIs to invest in Indian assets and diversify their financial portfolio. ➔ Convenient Payments: Using foreign currency non-repatriable account (FCNR), non-resident ordinary account (NRO), or non-resident external bank account (NRE) accounts makes it simple to pay premiums. ➔ Family Protection: Having a life insurance policy in India promises financial security for your dependents wherever they may be residing. ➔ Tax Benefits*: Depending on their eligibility, NRIs may also take advantage of tax benefits* under Sections 80C and 10(10D)** of the Indian Income Tax Act. ABSLI gives you a range of life insurance plans tailored specifically for NRIs, offering a mix of protection and investment opportunities. Some standout options include the ABSLI Life Shield Plan [UIN: 109N109V06], ABSLI Wealth Max Plan [UIN: 109L073V05], and ABSLI Salaried Term Plan [UIN: 109N141V01], each packed with attractive features. If you're an NRI thinking about securing life insurance in India, these plans are definitely worth a closer look.

Wrapping Up,

Because life insurance is more affordable and has more coverage options and tax advantages*, NRIs can buy it in India and save a lot of money. NRIs should take responsibility for their family’s financial future, just like the leads in the film “Zindagi Na Milegi Dobara” did. No matter where life's journey takes you, you can ensure your loved ones' financial security and peace of mind by purchasing an ideal life insurance coverage.