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Can NRIs Avail Term Insurance in India?

IndianMoney.com Research Team | Posted On Thursday, July 11,2019, 05:53 PM

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Can NRIs Avail Term Insurance in India?

 

 

A term life plan for NRIs is a customized term insurance policy, which offers insurance cover to Indian citizen’s residing in a foreign country. Term insurance offers death benefits to the nominees of the policyholder. This article aims to discuss the various aspects related to NRI term insurance policy.

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Can NRIs Avail Term Insurance in India?

How to Procure Term Insurance?

An NRI can purchase a term life plan in two different ways. They are:

  • An NRI can purchase the policy when he/she plans to visit India. This method is convenient to families who have settled abroad and make a yearly trip to India. Once the policyholder completes the documentation and other formalities, the policy comes into force and is considered similar to other policies availed by Indian citizens.
  • An NRI can also purchase term insurance in the country where he resides through the mail order business. The policy is verified by an Indian diplomat or an Indian official.

See Also: Term Insurance For NRIs

NRI Term Insurance Policies – Features:

Some of the key features of NRI term insurance are summarized below:

Policy Term: The tenure of term insurance plans for NRIs generally ranges from 6 months to 25 years. The minimum entry age is 18 years and the maximum age of entry ranges from 55 to 60 years, depending on the tenure offered in the policy.

Premium and Sum Assured: NRI term insurance offers a maximum insurance coverage of Rs 1 Crore. The premiums are determined based on several factors like policy term, the sum assured, frequency of premium payments and the riders availed.

See Also: Term Insurance for NRIs in India

In case of death of the policyholder, the sum assured is directly transferred to the nominee’s NRE account. While making claims, the policyholder must submit authentic documents and will be paid in the currency mentioned in the policy document.

Grace Period: The main feature of these term life insurance plans is that it offers a grace period to pay the premiums. This is beneficial in case you forget to pay the premium within the due date. For a policyholder who pays yearly or half-yearly premiums, the grace period is a maximum of 15 days from the due date.

Policy Renewal: There are some insurance companies which offer the policyholder, the facility to renew the policy at the time of maturity. In case the insured opts for renewal, he/she must take certain medical tests to meet the renewal criteria. This facility is offered to an individual who has good track record of premium payments without any defaults.

See Also: The Need for an NRI to Purchase a Life Insurance Policy

Premium Payment through Internet Banking: As the NRIs have settled in foreign countries, the insurance companies offer them the facility of online policy management and paying premiums via net banking.

To pay premiums through net banking, the policyholder must have a bank account at any authorized banks in India or abroad.

The various online payment options include payment through FCNR account, NRE account, NRO bank account and payment in foreign currency.

Document Requirements:

There are several documents requested by the insurance company which must be furnished to avail term life insurance, if you currently reside in a foreign country. These documents are as follows:

  • Proposal application
  • Proof of age
  • Proof of income
  • Report on the health condition
  • Attested copy of the passport

See Also: What NRIs Need to know Before Buying Health Insurance in India

While purchasing a term life plan via mail order business, you might have to submit additional documents. The sum assured and the policy premium is determined based on the country of residence, nature of employment and the income of the policyholder. Currently, there are many Indian companies which offer term life insurance to NRIs. These policies can be managed online.

In case of death of the policyholder, the nominee must furnish the original policy documents, identity proof of the nominee, death certificate of the insured person and so on. In this case, if the policyholder dies in a foreign country, then the death certificate must be attested by an Indian authority like the high commission or Indian Embassy. The sum assured would be paid in a currency mentioned in the policy document.

See Also: Can Non Resident Indians Take Up Insurance Policies In India

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