Term insurance for NRI is becoming a popular insurance policy in the country because of the affordability and the benefits of the policy. If you are an NRI and want to buy the policy then you need to ask yourself the following three questions.
Q.1: Can an NRI buy term insurance in India?
A: The term insurance plan can be bought by any person with an Indian origin be it an individual residing in India or an NRI.
Q.2: Does the NRI need to be present in India while buying the term plan?
A: The insurance companies in India offer the option to buy the plan without being present in their office. All the NRIs need is written communication. Some insurance companies require you to take medical tests before you can buy the policy. In that case, you can take the tests in the country of your residence and send the reports to the insurer. The cost of the tests has to be paid by you.
Q.3: How can NRI’s pay premium?
A: For NRIs I, the insurance companies provide payment options such as Foreign Currency Non-Resident (FCNR), or Non-Resident External (NRE) bank account, Non-Resident Ordinary (NRO) bank account, and foreign currency remittance. The NRO bank account can be used to pay the premiums in Indian currency. A few insurance companies allow payments in foreign currencies too. The FCNR or NRE bank account can be used for that.
Factors to consider before buying the term plan in India
Buying an online term plan for NRI in India is really simple. However, before you decide to invest in the policy, here are a few factors that you need to consider:
1. Cost of the term Plan
Before you buy the term plan from India, it is a good idea to calculate your premium using term insurance calculator and compare the cost of premium in India with the premium value in the country where you currently live. Once you know which plan is more affordable and has better value for money, you can make the right decision. For example, if you are living in the USA then a 20-year term plan will cost you around USD 800 in yearly premiums and in return, you get a death cover of USD 5 lakh.
2. Tax regulations
The NRI insurance plans come with tax benefits in India. However, in most other countries, the term insurance cover is not 100% tax-free. You may get tax benefits on the sum assured received by nominee, but any bonuses or other benefits are taxable.
3. Claim settlement ratio
Before buying the policy from any particular insurance company, it is important that you find out about their claim settlement ratio. This will help you understand if the insurer is known for settling the claim fast or if there is a delay in doing the same.
Term insurance is a necessary tool to make sure that your family will be financially secured when you are not around. You must certainly opt for it irrespective of whether you are an NRI or an Indian citizen.
