How NRIs Buy Term Insurance In India?

As an NRI, you are aware of the challenges and opportunities that come with living away from your home country. In this journey, it is crucial to ensure that you have a safety net in place to protect your loved ones from unforeseen circumstances. This is where term insurance steps in as a significant tool for your financial planning. Term insurance holds immense importance for NRIs like yourself, as it provides comprehensive coverage that safeguards your family's future, even when you are not physically present with them. By opting for term insurance in India, you can leverage the benefits of competitive premiums and extensive coverage options tailored to your and your family's specific needs. So, whether you are planning to settle abroad permanently or have intentions of returning to India in the future, term insurance is an essential aspect of your financial planning.

Are You Still Confused About Whether You Can Buy Term Insurance In India?

If you were born in India but opted to settle elsewhere for better work opportunities or other reasons, you are considered an NRI (Non-Resident Indian). The good news is that geographical boundaries no longer pose a hurdle for NRI customers who wish to purchase term insurance plans in India. You can effortlessly purchase the finest term insurance plan in India as an NRI. Regardless of your residential status, if you are of Indian origin, you can secure this policy in your home country, safeguarding both yourself and your loved ones. Simply ensure you have the requisite documents to prove your Indian citizenship, including valid address proof and recent ITR, and you are good to go.

When Should NRIs Buy Term Insurance?

You can opt for a term insurance policy if any of the below-mentioned scenarios hold true for you:
● Considering your role as the primary provider for your family, it's worth considering the benefits of obtaining a term insurance policy. This type of coverage can provide financial security for your loved ones who depend on your income.
● Additionally, if you have made investments in properties within India and have taken loans to support these investments, then a term insurance claim can help your family pay off the debts while helping them achieve both short-term and long-term goals.

How Does Term Insurance For NRI Work?

Term insurance for NRIs is a tailored product that can seamlessly help you achieve your goals of providing a financial safety net to your loved ones. This insurance plan functions quite similarly to a regular term insurance policy. Regardless of your residential status, it ensures that your family is protected should something unfortunate event happen. To keep the policy active, you simply need to pay the premium on a regular basis. Term insurance provides pure risk assessment. In the unfortunate event of your demise during the policy's active period, your family will receive a sum of money, known as the sum assured, from the insurance company. However, if you manage to survive until the end of the policy term, you will not receive any benefits from the insurance company. You can buy term insurance from Indian insurance companies that specifically cater to your country of residence. Term insurance bought in India covers all types of death regardless of location. For example, if you purchase a policy in India and unfortunately pass away in Singapore, Malaysia, Hong Kong, Switzerland or any other country during the policy term, rest assured that your family will still receive the claim. The location of your death will not affect their entitlement to the claim amount. Please note that suicide within the first year of purchasing the policy is not covered by term insurance. In the unfortunate event of suicide within the first policy year, the insurance company will refund the premium paid to the nominee of your policy.

A Guide To Purchasing Term Insurance In India

Find below a brief guide to help you secure the best term insurance plan in India!

👉Application Process

You can apply for term insurance as an NRI through two convenient methods, which are outlined below:

1. Within India: You can conveniently purchase the policy while on a visit to India as an NRI. The process is relatively easier and follows the same simple steps as it does for an Indian citizen:
   ➔ Choose an insurance company that provides coverage for your residing country.
   ➔ Select a plan that best suits your needs and preferences.
   ➔ Customise your plan by choosing your preferred coverage, policy period, and any additional riders for extra protection.
   ➔ Provide your personal details and submit the form along with the necessary documents (refer to the lists mentioned below).
   ➔ Start paying the premiums that you selected while purchasing the policy as per the premium paying terms.
   

2. Within Resident Country: You also have the option to conveniently purchase term insurance from the comfort of your own resident country.
   ➔ You can initiate the process by writing an email to the insurance provider. To complete the process, ensure that you provide all the necessary details for verification. This verification will be carried out by Indian embassy officials, an Indian diplomat, and/or a notary.
   ➔ If you are a student, your college/university head or supervisor may also assist you with the verification process.
   ➔ With tele-medical checkups, purchasing term insurance plans online has become effortless for NRIs, no matter where you reside. Simply schedule a video or tele medical checkup, and you can easily complete the underwriting process from the comfort of your own country.

Keep in mind!

Most insurance companies maintain a list of countries in which they do not provide insurance coverage. If you reside in a region plagued by political instability, you might encounter increased premiums. To avoid any surprises, it is crucial that you thoroughly review the policy document and conduct diligent research.

👉Required Documents

If you're an NRI purchasing a term insurance plan in India, you'll need to provide the insurance company with the following documents: ● Ensure that you have duly filled out the application form. ● Submit an attested copy of your passport and visa. ● Submit the medical tests and reports. ● Provide a certificate as proof of your age. ● Submit proof of your residence. ● Include income proof papers. ● Include the last entry-exit stamp. ● Additionally, be prepared to provide any other documents requested by the insurance company. Note: The required documents may differ based on the insurance companies.

👉Premium Payment Terms

If you are looking to pay premiums for term insurance policies in India, rest assured that insurance companies offer a range of options. You can conveniently make payments through-
● Non-resident Ordinary (NRO) account,
● Non-resident External (NRE) bank account, or
● Foreign Currency Non-Repatriable (FCNR) account.
Make sure to check the currency in which your policy is issued. If your term insurance policy is issued in a foreign currency, you'll need to pay the premiums in that specific foreign currency from an NRE/FCNR account. However, if the policy is issued in Indian rupees, you will have to pay the premiums through an NRO account.

👉Payout By The Insurance Company

Just like you pay premiums in the currency as mentioned on your policy document, the death benefit payable under a life insurance plan is also payable in the same currency, whether it's rupees or foreign currency. To ensure that your nominee receives the claim payment, it is important to submit the required documents in accordance with the policy terms. When your family raises a claim, the insurance company will require and shall request the original policy document, proof of identification for the nominee, and the death certificate of the insured person, among other few things. Please note that the terms and conditions may vary across insurance companies and products.

Wrapping Up!-

As an NRI, purchasing a term life insurance plan in India is a wise and thoughtful decision which can provide you and your loved ones with financial security and peace of mind. By following this advisory, you can navigate through the intricacies of the insurance market and make an informed choice that suits your individual specific needs. Remember, investing in term insurance is not just a financial decision but also a testament to your commitment towards protecting your family's future. So, take the leap and embark on this journey towards safeguarding and protecting who matters most to you.