Health Insurance for NRI in India or Abroad is a crucial decision. Health Insurance is very vital as we have experienced the importance during COVID times. Here are the important considerations and factors to consider when an NRI invests in Health Insurance.
The key questions are:
- Can NRI buy Health Insurance or Mediclaim policy in India?
- Should NRI buy Health Insurance policy?
- What important criteria to consider?
- Other benefits like Income Tax for NRIs for buying the health insurance policy.
This article is part of a series on NRI Insurance. The details of the series are as below:
NRI Insurance – An Introduction (Click for Detailed Article)
NRI Life Insurance & FAQs (Click for Detailed Article)
Term Insurance for NRIs (Click for Detailed Article)
NRI Health Insurance & FAQs (current article)
NRIs are allowed and encouraged to buy Health Insurance in India.
Should One Buy Health Insurance for NRI In India or NOT?
The decision depends on the situation you are in.
In case you are going abroad to come back to India in 3-5 years, it is better to buy Health Insurance as soon as possible. The reason is, by the time you are back you have a Health Insurance policy in hand with preexisting disease time-lapsed and a good track (hopefully).
Similarly, if you are already abroad and plan to return to India in 2-3 years you should buy health insurance for the same reason as mentioned above.
If the above 2 situations are not there, it is better to buy health insurance from an insurance company of your residence country. This is to ensure health coverage while you are a resident of that country.
Mediclaim for NRI, His Family & Parents in India
If you travel to India frequently or your family members reside in India or you are a pilot or in the Merchant Navy, it is best to have a health policy in India by an Indian insurer.
India offers good quality treatment at a low cost. Hence you can cover your family here.
Factors to consider while applying mediclaim policy for NRI
- Age, gender, Family member’s age
- Duration of stay abroad.
- Likely time of returning to India.
- Location of family members
- Current health & occupation
- Currency in which premium will be paid.
- The claim can be repatriated to the extent of premiums paid.
Importance of Geographical Coverage
NRI can be a globe trotter. It is important to ask – will he get a claim in the country of his choice?
Most of the NRI mediclaim policy in India provides health benefits is India only. You must check this before you invest in such a policy.
In case your existing policy does not cover outside treatment you should change the policy. The policy can be ported (means you will get your earlier benefits like NCB & Track with the new insurance company also).
In case your travel to India is very limited and your employer does not provide adequate cover, you should look for a health policy from the insurer of your home country.
Claim Procedure for NRI Health Insurance
The claim of health insurance are of 2 types:
Cashless: You show your health policy and the rest hospital takes care. They will liaison with the claim department of the insurance company and will get the bill paid by them you may have to pay a small amount for the things not covered in the policy.
Reimbursement: You settle the bill and inform the company about the treatment. You may apply for reimbursement within 30 days of discharge of the patient.
Tax benefit of Health Insurance Policy for NRI
Along with medical coverage for the family, an NRI will also be eligible for a tax deduction on taxable income earned in India.
This deduction is not valid for the premium paid to by health policy abroad.
The deduction can be claimed for the premium paid for self, parents, spouse, and dependent children. However, the health insurance policies which are approved by the Insurance Regulatory and Development Authority of India (IRDAI).
The deduction that can be claimed is:
Rs 25,000 for premiums paid for the health insurance of self, spouse, and dependent children, including the expenditure of up to Rs 5,000 on preventive health check-up.
Additional deduction of Rs 25,000 for the health insurance of parents aged up to 60 years.
An additional deduction available is Rs 50,000 for the premium paid for health insurance of parents above 60 Years of age.
If both the taxpayer and parents are aged more than 60 years, the maximum deduction that can be availed under this section is to the extent of Rs 1 lakh.
Health Insurance helps NRIs who are liable to tax in India on Indian source income like property rental, interest income, dividend, etc.. They can avail this deduction to reduce their tax liability as well as to ensure healthcare for their family in India.
Contact me for any question on this topic on madhupam at the rate thewealthwisher dot com.
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