Why Should NRIs Purchase Term Insurance in India Instead Of Abroad?

Having an insurance policy in your portfolio is a must, as an unseen emergency can strike anytime in any city or country. But, if you are an NRI (Non-Resident Indian), you might wonder if you can take a term insurance policy in India. And you might as well have many more questions related to the same. So here’s looking at some benefits of buying online term plans in India instead of foreign countries. 


Can NRIs purchase a term insurance plan in India?

Yes, an NRI can purchase term insurance in India. As per the Foreign Exchange Management Act, Non-Resident Indians and People of Indian Origin can take an insurance policy in India. This way, they get to protect themselves and their families. 


Is it necessary for the NRI to be present in India when purchasing the policy?

NRIs can now buy a term insurance policy in India without the need to be present in person. So, how are the medical check-ups done? NRIs can pick the suitable insurance plan that allows them to complete the medical check-up over a call from the country they reside in. This is called a tele-medical check-up, and many insurance companies in India provide this feature. Tele-medical check-ups became popular during the pandemic, as they did not require policyholders to visit a doctor/hospital for a physical check-up. This is now being used to complete the mandatory medical check-up for new NRI policyholders. 


How can NRIs pay the insurance premiums?

An NRI can pay for the term insurance plan via the below-mentioned payment methods.

• Payment settlement in the currency of their resident country

• Non-resident bank account

• NRE (Non-Resident External) or FCNR (Foreign Currency Non-Resident) bank account

Most insurance companies in India offer term insurance policies in Indian currency. If the policy is in foreign currency, the premiums are to be paid from the NRE account of India. However, if the policy issued is in the Indian currency, NRIs can pay the premiums via their NRO (Non-Resident Ordinary) accounts. 


Is the premium amount affected by the country of residence?

This is one of the most commonly asked questions, and the answer is ‘Yes.’ In normal situations, the premiums offered to NRIs are the same as Indian residents. However, it can change if the individual resides in a country with a higher risk factor. For example, insurance premiums can be higher if an NRI is from a country prone to military issues, has civil unrest, or has an unstable government. 


Why term plans in India make more sense for NRIs 

Term insurance policies in India are quite affordable and beneficial for NRIs when compared to those from abroad. Let us take a look at the reasons.

• Insurance companies in India offer various term insurance plans with attractive features, low premiums, and high coverage. NRIs can choose a suitable plan and buy it online. One can also check the premium to be paid by using a term plan premium calculator

• The term insurance policies in India provide coverage for up to 100 years. There are many whole life plans of this nature. Online term plans are also quite flexible. 

• NRIs also get to choose policies with the desired premium without needing physical medical check-ups.

• To keep the plan active and to ensure that the policies are renewed on time, NRIs also opt for the auto-debit of premiums via their Indian or international accounts. The payments can also be made via internet banking with ease.

• NRIs are also provided with an option to opt for additional coverage for critical illnesses, enhancing the base plan.

• NRIs are also eligible for tax benefits under Section 80C of the Income Tax Act for premiums paid and Section 10(10D) for death benefits.

• Another added advantage provided by Indian insurance companies is the claim settlement ratio. Most Indian insurance companies have a claim settlement ratio of over 95%. Some top insurance providers have a claim settlement ratio of over 99%.

• Also, the premium rates of Indian insurance plans are much cheaper when compared to those from abroad. For example, suppose the premium for an insurance plan in UAE costs Rs. 2100 per month. In that case, NRIs can obtain the same policy for a premium of Rs. 840 per month here in India (only indicative examples). So, foreign premiums are sometimes higher than in India. 



If you are already residing in a foreign country, or if you have plans to move abroad soon, you can always plan and purchase a term insurance plan in India. This will be a cost-effective move by all means.