As the primary caretaker of your family, you are the backbone of the family’s financial needs. In your presence, they will be taken care of. However, what happens to them in your absence? Term insurance ensures that in your absence, the needs of your loved ones are taken care of. As an NRI (Non-Resident Indian), there might be several questions in your mind on how to go about buying a term plan in India.
Can NRIs purchase term insurance?
In simple terms, yes, you, as an NRI, are eligible to buy term insurance in India. As long as you meet the terms and conditions of the insurance company, you can buy term insurance. With the help of the Foreign Exchange Management Act, you can easily avail of term insurance in India. There are various types of NRI insurances available through which you can protect your family’s financial health.
How to buy term insurance as an NRI?
As an NRI, there are two ways you can go about buying term insurance-
- You can simply buy term insurance while you are visiting India. Once you have submitted all the documents and completed the underwriting procedures of your policy; they consider it as any other term insurance a regular Indian citizen opts for.
- You can even purchase a term plan in the country that you are currently living in through Mail Order Business. An Indian diplomat, a notary, or an officer of the Indian embassy can also verify your policy.
What is the term insurance eligibility for an NRI?
When you buy a term policy in India, there are certain terms and conditions that you need to meet. Each insurance company may have different specifics for eligibility. However, the core eligibilities are usually the same. As an NRI, you need to meet one or more of the criteria mentioned below.
- You, as an NRI, must have lived outside India for a fixed period, as mentioned in the policy criteria.
- Your parents or grandparents are a citizen of India.
- You have or have had an Indian passport at some point in your life
- You are married to an Indian citizen
What documents are required for buying a term plan in India?
When you are buying NRI insurance, here are some documents you need to submit for term insurance:
- Proof of age
- Proposal form
- Medical reports reflecting your health conditions
- Attested passport copy
- Income proof
- Application amount
The application amount is usually the amount of the first premium. Also, if you have any chronic health conditions, ensure that you submit the medical reports of those too. When you are purchasing a term plan through mail order business, you may have to submit additional documents like the nature of the job and country of residency.
What are the features of NRI term insurance?
Term insurance is quite beneficial as it offers huge cover for a low premium. Here are some features of the term policy:
Tenure of the policy
Term insurance of an NRI citizen can be from anywhere between 6 months to 25 years. You can use the term insurance plan calculator online to understand the premiums you have to pay according to your tenure.
If, as an NRI, you miss the date of your term insurance premium, you can opt for a grace period. This feature ensures that your policy is not abolished if you pay the pending premium within the grace period.
Premium and sum assured
With a term plan, you can choose a sum assured amount from two lakh rupees to a maximum of one crore. Use a term insurance plan calculator to get an estimate of the premiums of the sum assured you have to pay. Also, these premiums are also affected by the rider options you choose. In case of your demise, the insurer pays the sum assured to your nominee through your NRE account.
Payment through internet banking
As an NRI, you can use the feature of internet banking to pay premiums for your term insurance. All you need is an account in any allowed bank from which you can easily pay to the insurance company. Also, you can make payments in foreign currency, through an NRE/FCNR bank account, or with an NRO bank account as well.