NRI life insurance is essentially a life insurance policy that is tailored to meet the coverage needs of Non-resident Indians or NRIs and their loved ones. Even if an applicant is temporarily residing in another nation, these plans can be availed from leading life insurance providers in India. However, life insurance for NRIs is subject to Foreign Exchange Management Act (FEMA) standards and other Insurance Regulatory and Development Authority of India (IDRAI) laws.
Read along to find out more about insurance policies for non-residential Indians and if you are eligible to purchase one or not.
Types of Life Insurance Policies in India for NRIs
Non-resident Indians who intend to buy a life insurance policy have a few alternatives to choose from based on their specific needs and life stage.
Here’s a list of the common types of life insurance plans for NRIs available in India:
- NRI Term Plans: NRI term life insurance plan provides a death benefit that is equivalent to the term plans for resident Indians. Typically, these are simple protection plans in which the insurance provider pays out the sum assured if the insured doesn’t survive the specified policy term. However, many leading insurance companies provide NRIs the option of purchasing add-ons for the term policy. Typically, such add-ons range from critical illness cover, disability cover, and accidental death, and supplement the coverage extended by the term insurance plan.
- Child Plans for NRIs: NRIs may purchase insurance plans designed for children to safeguard the future of their kids in the event of the policyholder’s untimely death. These life insurance plans intend to help NRIs build a corpus for important life objectives for their kids, such as higher education. NRI life insurance plans also come with the scope to include add-ons such as waiver of future premiums to help manage financial liabilities better in case of the untimely death of the policyholder.
- NRI Retirement Plans: These plans allow NRIs in India to invest in retirement plans that help generate a stream of monthly income after they retire through the purchase of annuities. These NRI insurance plans can assist individuals in retirement planning and help them safeguard their finances long after they have retired and stopped receiving a regular income.
- Unit Linked Insurance Plans for NRIs: ULIPs are a form of insurance plan that brings together the advantages of life insurance cover and investment. Notably, NRI ULIPs operate in the same manner as the ULIPs designed for Indian citizens. In other words, in case of the untimely death of the policyholder during the policy term, the family members of the insured get the death benefit. However, if the insured survives the life insurance plans policy term, then he/she will get returns depending on the investment units that were linked with the policy.
Who Can Purchase an NRI Life Insurance in India?
Besides local Indians, several categories of applicants can buy NRI life insurance plans, including:
- Non-Resident Indians (NRIs): These are Indian nationals who have valid Indian passports and are temporary residents of another country.
- Person of Indian Origin/Overseas Citizen of India: These entities refer to the nationals of other nations other than Bangladesh and Pakistan, who also meet the following eligibility requirements:
- Applicants who used to have an Indian passport
- Applicants or their parents/ancestors were Indian citizens under the Citizenship Act of 1955 or the Constitution of India
- The applicant is an Indian citizen’s spouse.
- Foreign Nationals: These entities are the nationals of other nations who live in India. The qualifying requirements and documents needed for such insurance policies may differ slightly from one insurer to the other. However, the leading life insurers in India must also observe certain norms and limits while issuing NRI life insurance to citizens of certain countries. Visit the website of your chosen life insurance provider in India to find out if the country you reside in, falls under the nations that are barred from purchasing a policy from them.
Documents Required Life Insurance Plans for NRIs in India
The paperwork requirements for NRIs buying a life insurance policy in India tend to vary slightly from those required by a resident Indian. The list of documents required for KYC norms varies among insurance providers. Regardless, here’s a list that is common to most:
- National Identity card or resident card issued by the government of the country they reside in. This may include the NRI applicant’s passport with their overseas address
- Driving license with their overseas address
- Mobile/water/gas/telephone or other utility bills
- Credit card statement that’s at least three months old and issued at their overseas address
- Copy of resident permit or work permit that’s at least 3 months old and features their overseas address
- Employer’s certificate that will serve as their proof of overseas address
Besides these NRI applicants would also be required to submit:
- Proof of age
- Income proof
- Copy of Passport
- Medical records
Make sure to find out the entire list of documents that would be required to purchase life insurance for NRIs to ascertain if you possess them or not and align your application accordingly.
Why Should NRIs Purchase Life Insurance in India?
There are several reasons why a non-resident Indian should consider purchasing a life insurance policy in India. A few of such benefits are discussed below:
- To ensure the financial security of their dependents by creating a provision for the loss of income in case of the insured’s untimely demise.
- Helps make sure that the burden of any outstanding debt of the policyholder doesn’t affect the quality of life of their dependants.
- To make the most of the benefit of diversifying the investment portfolio and claim applicable tax benefits to save on tax liability.
- For creating a long-term corpus to meet financial goals and generate wealth.
However, to make the most of NRI life insurance policies, individuals must make it a point to avail of the same from a leading insurance company. This will ensure quality service and ensure guaranteed claim approval, and timely advice on crucial doubts and queries.
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Finally, NRI life insurance plans are designed exclusively for Non-resident Indians and their loved ones, providing financial stability and peace of mind. NRIs may pick from a variety of plans, including term plans, child plans, retirement plans, and unit-linked insurance plans. NRIs, Persons of Indian Origin/Overseas Citizens of India, and some foreign nationals living in India are all eligible.
NRIs must provide evidence of identification, residence, age, income, and medical records throughout the paperwork procedure. NRIs might consider buying life insurance in India to protect their dependents, defend against outstanding debts, diversify their investment portfolio, and meet long-term financial objectives. Choosing a renowned insurance provider offers dependable service, claim acceptance and professional guidance.
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