Life Insurance for NRI: Common Questions Answered

Life can be unpredictable, and while we cannot control what happens to us, we can make certain that we and our families have the means to deal with such situations. Life insurance is one such way that may ease our family’s financial burden upon the death of the insured. While Indians living in India can easily get insurance coverage both online and offline, it was NRIs who faced difficulties back then. However, with the advent of the internet, the picture has improved.

The insurance regulator in India has made it extremely profitable for NRIs to get life and health insurance. If you live overseas and looking to get life insurance for NRI, you might be curious and have some questions regarding the life insurance. For example, what is the current change that benefits NRIs, and what type of life and health insurance are we discussing for NRIs?

Is premium different for NRIs or are they country-dependent?

It is completely country-dependent. Since we’re talking about worldwide coverage, insurance companies divide themselves into US and non-US divisions. Certain countries outside the United States are also on a downward trend. In today’s global context, countries where wars have become commonplace include Russia, Ukraine, and now Israel, along with Palestine, risk profiling has become increasingly important for insurance companies.

There would be other countries on the decline list of these insurance providers. Pricing would be slightly higher than a local policy issued in India. However, the difference would be small. It still makes a lot of financial sense for an NRI to obtain a life insurance for NRI in India.

Do NRIs need to travel to India to purchase life or health insurance? Is their actual presence necessary?

Yes. So here’s a big catch. When you apply for a life insurance policy, or even a health insurance policy, the insurance company may request that you undergo a health checkup. Assume you are in London and wish to acquire health or life insurance for NRI coverage from India. You may not release it but getting a health check-up in London would be extremely costly. However, getting a health check is a prerequisite that can’t be missed out. 

Since you are in London, your insurance provider will not bear the cost. So, in such case, you will have to pay for your health checkup out of pocket. In this scenerio, the best advice for NRIs is to take up a life insurance or health insurance policy whenever they visit India, because any health checkup necessary by insurance firms in India is normally covered by the insurance companies itself.

In terms of service, do NRI consumers get more features or is it the same across the board?

It is more or less comparable. It’s just that health insurance gets a little more comprehensive. When it comes to health insurance, the options available to NRI customers are quite diverse. In India, IPD is the primary coverage, which includes inpatient hospitalization. However, the NRI portfolio also includes OPD coverage. There is provision for critical sickness coverage, health risks and mental illnesses. All of these details are also covered, making the proposal for NRI health insurance quite appealing.

Life insurance is generally comparable. S/He may have access to critical illness and other riders offered by life insurance firms on a far larger scale than in India. In reality, when an NRI purchases life insurance for NRI, the total amount will be significantly higher. However, the underwriting or policy coverage and benefits would be more or less comparable. It’s just that s/he has the option to select more advanced perks from these plans. 

What would be the premium NRIs have to shell out and how the claim settlement will be done?

The premium could range from Rs 10,000 to Rs 45,000 per year, based on the limitations specified by the policyholder. So it’s roughly 15-20% up and down with different insurance companies. Returning to the claim settlement process, is pretty straightforward. They provide policyholders with a global support centre number, which they will have at all times.

In the case, that they need to contact insurance companies for a claim process, they will be assigned a dedicated person in that country who will assist them with all aspects of the process, including documentation and touch points within that hospital or area, wherever s/he needs to submit or make the process appear very simple for the policyholder. So, in the event of a situation like this, the policyholder will receive excellent assistance in filing, processing, and settling his claim.

It is worth it for an NRI to buy the Life Insurance for NRI

A couple of years ago, the regulator, in conjunction with the Ministry of Finance, implemented a policy allowing NRIs to purchase life or health insurance policies in India without paying GST. This means life insurance for NRI plans will receive an 18% waiver if the premium is paid through his NRE account which is a significant cost reduction.

For NRIs, term life insurance from Indian insurers is an intriguing choice for protecting their families’ financial futures back home. Life insurance plans provide peace of mind and security by offering low-cost coverage, rupee-denominated payouts, and potential tax benefits. NRIs can make sound decisions by carefully examining their needs, analyzing available options, and seeking advice from professionals.