As per Zurich Life Insurance Survey done in UAE between 2016-2018, the lowest age of deceased for an NRI family claimed for life insurance was 27 Years! For the Critical Illness claim, the age was 28 Years! NRI Insurance is a must to cope up with Life Uncertainties. Being away from home, scattered life even make it difficult to plan right & required Insurance for NRIs. Here is a series to clear all your doubts.
The most important question is – Should NRI buy Insurance in India? And, before that, the question should be – Can NRI Buy Insurance in India?
The answer to both questions is YES.
This series will cover the following topics on NRI Insurance:
NRI Insurance – An Introduction (current article)
NRI Life Insurance & FAQs (Click for Detailed Article)
Term Insurance for NRIs (Click for Detailed Article)
NRI Health Insurance & FAQs (Click for Detailed Article)
NRI Insurance – Requirement
Being NRI is just a tax or residential status. After all, we are all human beings and pass through same phases of life. So it is not a doubt that NRIs need Insurance – Be it life insurance to cover death, Medical insurance to cover illness & hospitalization & asset Insurance like Motor, home, etc.
Life Insurance for NRI
The majority of NRIs have small families to support. Life Insurance ensures family-related goals are fulfilled in the unfortunate demise of the main breadwinner.
It is a financial must & not an emotional.
NRIs can buy life insurance from the country of residence as there is no restriction on this. It is recommended & best that you buy Life Insurance when you are in India.
In case you have insurance policies before you were an NRI, those policies will have no impact on your change of status on becoming NRI in the future.
The insurance policy can be paid through the NRO account or NRE account whichever is comfortable. You may also pay your premiums in foreign currency and save GST on it.
An important thing to note is when you buy a new life insurance policy, the premium is decided on your current treat of life. In case you live in a country with a threat, the policy premium might increase or policy cover can be denied.
Any investor availing life insurance must buy life insurance as per his life goals. For goals to align the amount & time horizon must be taken into consideration.
Classic mistakes are – Taking life inadequate life cover & insuring life when it is not required.
Inadequate cover means – covering for less amount or buying policies like ULIPs, Moneyback which yield low returns. One also makes insurance premiums costly when they pay insurance when they are old.
Both cover and tenure should be chosen wisely. One must buy only a Term Plan for a suitable tenure. Mixing or expecting investment returns from Insurance is a myth. Beware of tall claims made by agents & unauthorized persons.
Claims related to Life Insurance are settled in INR & credited to the NRO account.
Life insurance premiums can help you save taxes under Sec 80.
Health Insurance for NRI
NRI can purchase a health policy (Mediclaim) whenever he/she wants. An NRI is allowed to buy a health insurance policy in India to secure their health as well as that of their family members.
Most Indian health insurance policies provide treatment only within the boundaries of India, i.e. within the territorial boundaries of India.
Treatment overseas is typically not covered by health insurance policies bought in India by Indian Insurance Companies. But some policies cover you globally. You may also buy health policies of foreign companies that may provide treatment benefits incurred in India. However, you will not get tax benefits for such policies.
NRI shifting abroad for 3-5 years or if planning to shit to India, in 3-5 years must consider buying a mediclaim policy from Indian Insurers. This enables you to build a track of health as well as the time (2-4 years) for many pre-existing diseases also pass.
He/she can purchase a health plan whenever he visits India from where he/she want and complete all documentation required in the company. He /she can purchase Mediclaim while being abroad also. But in some cases, he/she has to bear medical charges.
NRIs are eligible to claim deduction up to specified limits for health insurance premium paid similar to Indian residents. The deduction can be claimed for the premium paid not only for self but also for Parents, spouse, and dependent children.
While buying for a health insurance policy one must go through policy terms concerning geographical areas covered, foreign exchange management regulations relating to settlement or repatriation of claims, etc.
Motor or Asset Insurance for NRIs
In India, if someone driving your vehicle and meet with an accident then you have to pay the accident claim. As owners NRIs have to take an insurance policy to cover third-party claims or asset protection insurance.
For such policies, NRI is just like any other customer. The benefits & limitations will be as per the terms and conditions of the policy. It is prudent to insure your house & valuables in India. It serves as peace of mind. These policies can be purchased online while being in India or abroad. The premium can be paid via NRO or NRE accounts.
The idea of this article is to make you aware of your Insurance requirements. Please feel free to ask any questions. Also, do visit the links above to know in detail. These will further help you to make decisions regarding NRI Life Insurance, term insurance for NRIs & Health Insurance for NRIs.
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