Life Insurance is a contract signed between the policyholder, an individual, & a life insurance company, i.e. an insurance provider. The policyholder pays a certain amount of premium at fixed intervals of time. The insurance company pays the beneficiaries the amount insured on the insured event, such as death or a benefit defined at the maturity of the plan.
Whether an individual resides in India or abroad, the financial obligations towards the family remain the same. It is essential to secure the future of family members against any unfortunate event, & Life Insurance plays an important role here. For NRIs, a life insurance plan acts as a financial tool that helps meet financial obligations, along with financial planning & savings of tax.
How to Choose the Right Life Insurance Plan for NRI?
Provided are the steps to choose the right life insurance plan for NRI:
Step 1: Assess Your Life Insurance Goals
There are a variety of life insurance plans available in the market, so it becomes crucial to assess your financial objectives from the life insurance plan. It will ensure the proper selection of a plan along with the achievement of your financial objective.
Step 2: Compare Plans
Compare different insurance plans available to evaluate the features, costs, tenures, etc., that best suit your requirements.
Step 3: Calculate the Optimal Insurance Cover
Assess the financial requirements to calculate the optimal coverage amount, considering factors such as financial objectives, outstanding debts & liabilities, & lifestyle.
Step 4: Select the Correct Policy Tenure
Choose a suitable policy tenure, keeping your age & the age of other dependent family members in mind.
Step 5: Evaluate Tax Implications
While buying a life insurance plan, consider the tax implications to ensure better financial planning, which will help save money.
Reasons to Buy Life Insurance for NRI in India
Provided are the reasons to buy Life Insurance for NRI in India:
- Low Premium Rates
The premium rates offered to NRIs in India are pretty low compared to those offered to expats outside India. This means the premium amount is approximately 50-60% lower for the same amount of sum assured.
- Worldwide Cover
It offers worldwide coverage by providing 24/7 support with respect to claim settlement.
- Tele or Video Programs
NRIs can purchase life insurance plans by arranging medicals online through tele or video calls. This feature allows them to buy life insurance plans from their residing country without any need to come back to India to get their medicals cleared.
- Medical Costs
These plans also include medical costs, which are to be borne by the insurance company rather.
- Pre-approved cover
Get a pre-approved cover of up to INR 2 crores & process it hassle-free without passing any medical examinations either online or offline.
- Large Number of Insurers
There are many insurance companies enrolled under IRDAI from which NRIs can compare the best plan for themselves. They can choose a plan based on the premium amount, claim settlement ratio, tenure of policy, sum assured, or any other benefits.
- Claim Settlement Ratio
NRIs can also examine the annual report released by IRDAI, which contains the claim settlement ratio of all the insurance companies in India.After reviewing the report, one should buy a plan with a claim settlement ratio of at least 95%, ensuring financial stability.
- Easy Claim Process
Purchasing life insurance for NRIs in India saves time in case of claim settlement, as they do not have to travel to their country to settle the claims.Hence, in case of any unfortunate event, any family member can visit the insurance company premises in India to settle the claim.
- GST Waiver
It also offers an 18% GST waiver on the amount of premium paid through the NRE account in a free-convertible currency.
- Additional Discounts
If you opt to pay the premium amount annually, an additional 5% discount is received, hence increasing the overall savings to 23% on the premium amount.
Eligibility Criteria
The mentioned category of individuals can avail life insurance plans for NRIs:
- NRIs
An Indian citizen with a valid passport who is residing in another country.
- Foreign Nationals
They are citizens of a foreign country residing in India, i.e. an individual who is not an Indian citizen.
- Person of Indian Origin or Overseas Citizen of India
- Any person of full age & capacity,
- who is a citizen of another country but was a citizen of India at the time of, or at any time after the commencement of the Constitution or
- who is a citizen of another country but was eligible to become a citizen of India at the time of the commencement of the Constitution or
- who is a citizen of another country but belonged to a territory that became part of India after the 15th day of August 1947 or
- who is a child or a grandchild or a great-grandchild of such a citizen, or
(b) A person who is a minor child of a person as mentioned in point (a) or
(c) A person who is a minor child whose both or any one of the parents are Indian citizens or
(d) Spouse of foreign origin of a citizen of India or spouse of foreign origin of an Overseas Citizen of India Cardholder registered under section 7A.
Steps to Buy Life Insurance for NRIs
Provided are the steps to buy a life insurance plan for NRIs:
Step 1:On the India page, go to the tab “Term Insurance for NRI”.
Step 2:Enter the details required, such as name of insured, birth date, contact details, residing country, gender, etc.
Step 3:Now, click the tab “View Plans”.
Step 4:Mention the smoking & tobacco habits, annual income, educational background, occupation type, etc.
Step 5:Compare all the plans available & choose the one that best suits your financial requirements.
Step 6: Proceed to make payment.
Conclusion
Life insurance for NRIs is designed to offer financial protection to NRIs & their family members, irrespective of their residence location. Insurance companies offer a wide range of customised plans that will help meet your financial goals along with worldwide coverage & seamless financial protection.
