Life insurance is essential for all people. Whether you live in India or abroad, securing your loved ones in your absence is a must. Term insurance for NRIs (Non-Resident Indians) is particularly important as living life in a foreign country can be hard for your family members if you are no longer around to provide for them. In your absence, your family can use the money to relocate to India, cover their needs abroad, find opportunities to live their life comfortably, and do a lot more.
Here are some things NRIs should keep in mind when buying a term insurance.
Features of NRI term insurance
Here are some features of a term plan for NRIs
Policy term as per your needs:
NRIs have plenty of choices in selecting the policy tenure of a term plan. The tenure for term insurance for NRIs can range from 5 years up to 99 years.
Moreover, the minimum age to purchase a plan is 18 years, and the maximum can be up to 65 years, making it suitable for most people.
Life cover of your choice:
The sum assured can be chosen based on your preference. Term insurance for NRIs in India offers sum assured, ranging from ₹ 50 lakh up to ₹ 5 crore, catering to every individual and family’s unique needs.
You can choose a life cover amount depending on your income, lifestyle, debt obligations, and future financial goals.
It is generally recommended that your life cover amount should be 10-15 times your annual income.
NRI term insurance in India provides easy payment options for increased convenience. Payments can be made online through net banking/credit cards.
NRIs can also pay through their Non-Residential External (NRE) and Non-Resident Ordinary (NRO) accounts. Moreover, the premium payment term and frequency can be customised accordingly.
The documentation process is simple and quick. All you need are basic documents like your passport, identity and address proofs, and medical test reports (in case of any previous medical history), along with other KYC (Know Your Client) documents.
The application process is seamless with no unwanted delays.
How do term insurance plans for NRI work?
Term insurance for NRIs works just like other term plans in India. The policyholder pays a premium to the insurer in return for a sum assured. In the unfortunate event of the policyholder’s demise during the policy tenure, the sum assured is paid to the nominee.
NRIs can also select the Return of Premium (ROP) option, under which the sum total of all the premium payments is given back at the time of maturity, if the policyholder survives the term.
Additionally, NRIs can add other optional riders/add-ons to enhance their plan’s coverage.
What are the benefits of term insurance for NRIs?
Here are some advantages of term insurance for NRIs:
NRIs can enjoy tax benefits* on the premiums paid under Section 80C and on premiums paid towards other optional riders (based on the riders opted). The insurance payout is exempt subject to conditions prescribed under Section 10(10D) of the Income Tax Act, 1961.
Term insurance plans offer a sum assured in case something unfortunate happens to the policyholder. This is given to the nominee and is exempt from tax subject to conditions prescribed under Section 10(10D) of the Income Tax Act, 1961.
Term insurance for NRIs can be an excellent source of financial security. Term plans can be an affordable way to secure the future needs of your loved ones.
Select your payout
NRI term insurance in India offers multiple payout methods, such as lump sum, regular income, lump sum plus regular income, and increasing cover with time. You can select anyone based on your family’s preference and lifestyle needs.
Important documents for buying NRI term insurance
Here is a list of documents required to buy NRI term insurance in India:
LATEST MEDICAL REPORTS
AN ATTESTED COPY OF THE PASSPORT
APPLICATION OR PROPOSAL FORM
Term insurance for NRIs is a much-needed financial tool that can offer peace of mind and financial safety for a long time. It can secure your family members in your absence and help you build savings for the future.
Moreover, with the multiple policy terms and payment options, it is a hassle-free investment that requires very little of your time and attention.
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*Tax benefits are subject to conditions under Section 80C, 80D, 10(10D), 115BAC and other provisions of the Income Tax Act, 1961. Goods and Service Tax and Cesses, if any will be charged extra as per prevailing rates. Tax laws are subject to amendments made thereto from time to time. Please consult your tax advisor for more details