Term Insurance for NRI Salaried Individuals

Imagine you're on a boat, sailing through the vast ocean of life. Just like water surrounds and supports the boat, term insurance plays a crucial role in safeguarding your loved ones and securing their future. It acts as a protective shield, ensuring that even if unexpected storms arise, your family remains financially stable and can continue sailing towards their dreams.

But, if you are an NRI salaried individual, can you invest in term insurance? This is precisely what we’ll discuss in the article below.

Certainly! You can effortlessly purchase the finest term insurance plan in India, even if you are an NRI. The constraints of geographical boundaries no longer pose a problem for NRI salaried individuals who wish to secure a term insurance plan in India.

As the sole breadwinner in your family, your loved ones rely on your income for their livelihood. You also may have made investments in properties in India and may have also taken loans to support these ventures. By securing a term insurance plan, you can provide your family with the means to fulfil their short-term and long-term aspirations. Additionally, in the event of any outstanding loans or liabilities, the claim amount can be used to settle those financial obligations, too.

A term insurance plan is an incredibly simple product that offers you the easiest means to safeguard your family's financial future. If, unfortunately, you were to pass away while the policy is active, the insurance company will provide a sum of money, known as the 'sum assured', to your family. This sum of money essentially serves to replace your income and ensure that your family's financial requirements are met, allowing them to pursue their dreams and maintain their desired lifestyle without any compromises.

If you choose term insurance, remember it's pure-risk insurance coverage. This means that if you make it through the entire policy duration, no benefits will be paid out to you.

Let’s look at some of the significant aspects below that you should be aware of:

Necessary Documents

You'll need to provide the following documents to the insurance company:

• Filled out application form
• Certificate of proof of age
• Medical tests and reports
• Attested copy of passport
• Proof of income
• Any other documents required by the insurer

Premium Payment

Insurers in India have various options available for you to pay premiums for term insurance policies as an NRI. You can conveniently make premium payments through the following:

• Non-Resident External Bank Account (NRE)
• Non-Resident Ordinary Nature Account (NRO)
• Foreign Currency Non-Repatriable Account (FCNR)

It's important to consider the currency in which your policy is issued. If you’re issued a term insurance policy in a foreign currency, you'll need to pay the premiums in that specific foreign currency from your NRE/FCNR account. On the other hand, if the policy is issued in Indian rupees, you'll have to pay the premiums through an NRO account.

Term Insurance Payouts

Your nominee will receive the benefits from the term insurance policy in the currency mentioned on your policy document, whether rupees or foreign currency. To receive the claim payment, your nominee will need to submit the necessary documents as per the policy terms. These typically include the original policy copy, proof of identification for the nominee, death certificate of the insured individual, etc.

Death Coverage

When you purchase term insurance in India, it provides coverage for all types of death worldwide, with the exception of suicide within the first year of the policy. In the unfortunate event of suicide during the initial year, the insurer will refund the paid premium amount to your nominee.

Claim Payout Assurance

As per Section 45 of the Indian Insurance Act of 1938, if you have held a life insurance policy continuously for three years, the insurance company is prohibited from investigating or rejecting your nominee’s death claim on any grounds whatsoever. Hence, investing in term insurance in India is a wise choice, as it ensures that the claim will definitely be paid out to your loved ones if your demise occurs after three years of the policy being active (and, yes, within the policy term).

Understanding Taxation

Generally, if you pass away while the policy is in force, a majority of insurers will deposit the claim amount in an NRE account. And the country of your residence may levy taxes on the same. You should confirm the same beforehand so you and your nominee are aware of any future deductions.

Also note, if you are filing taxes in India, tax benefits* are available for term insurance premiums and claim amounts under the Income Tax Act of India, 1961.

• Under Section 80C of the Income Tax Act of India, 1961, the premiums you pay for term insurance will attract tax deductions on a yearly basis. You can claim a maximum deduction of up to INR 1,50,000.
• Additionally, if you were to unfortunately pass away during the policy term, the claim amount received by your nominee will be completely tax-exempt, as per Section 10 10D)** of the Act.

ABSLI Salaried Term Plan is tailored exclusively for you, a salaried individual seeking comprehensive protection. With the freedom to customise your plan according to your specific needs, this solution offers both lump sum and monthly income options. Whether it's ensuring your child’s education, maintaining a comfortable lifestyle, or meeting everyday expenses, this pure-risk term plan is designed to provide unwavering financial support. It empowers your family to embrace the future confidently in case the unexpected happens.

Some of the Key Features of the Plan:

• Choose from a diverse range of 4 plan options to match your unique protection needs perfectly.
• Enjoy life insurance coverage that spans up to age 70.
• Select from versatile options for death benefit payouts, whether you prefer a lump-sum or monthly income.
• Additional protection with the inclusion of an inbuilt terminal illness benefit.

Term insurance for NRI salaried individuals is not just a financial product but a powerful tool that provides peace of mind and security for you and your loved ones. By choosing term insurance, you are making a wise investment in your family's future, safeguarding their financial stability in case of any unforeseen events.