No matter where in the world you are, the most important thing for you is to protect your family. For Non-Resident Indians (NRIs), buying a term insurance policy in India is getting easier and cheaper nowadays.

In case you want to secure your dear ones financially in the country of their residence, here is an easy guide on what should be on your checklist while buying term insurance for NRIs.

1. Is It Truly Necessary to Have an Indian Policy?

First and foremost, you should figure out the reason as to why you want a policy from India. Many times, Indian term plans turn out to be very economical when compared to the ones you may find in the USA, the UK, or the UAE. Besides, since your family is in India, having a policy in the country will also help them a lot in submitting a claim in their own language and currency.

2. Make Sure to Scrutinize the Policy Type (Pure Term vs others)

A term insurance plan is the most basic form of life insurance cover. If you die, the insurer will pay your family a certain sum of money, and that’s it. There’s no complicated investment strategy involved. Usually, for an NRI, a “pure term” plan works better because it offers the highest insurance cover at the lowest costs.

3. The GST Benefit (A Big Money Saver!)

Have you ever thought of saving 18% GST on your premium? This is a great advantage for NRIs. To avail yourself of it, you are required to:

• Make the payment of the premium through an NRE (Non-Resident External) account.

Use foreign currency for payment.
If you adhere to these, the insurer may waive GST, thus reducing the premium. It is always a good idea to get this clarified with your insurer before making the payment.

4. Medical Check-ups: Will You Have to Travel?

Previously, a medical examination would require your physical presence in India. Now, that’s changed! Most companies provide telemedicine surveys, which simply mean a doctor will have a consultation with you via video call.

• Make sure to: Ask whether the company takes medical reports from the country where you currently live.
• Don’t forget: In case a physical examination is necessary, you may have to cover the expenses yourself if you are overseas or delay it until your next in-person visit.

5. The “Home Country” Rule

Does your insurance company cover the country where you live? Most Indian insurers provide cover to NRIs in familiar countries. However, if you reside in a “high-risk” area as declared due to war or unrest, you might get denied a policy. So, it is always true where you live to keep your claim from being denied later.

6. Claim Settlement Ratio (CSR)

The number reflects the company’s performance in settling claims. It shows from every 100 claims how many the insurer actually paid.

• Go for one with a CSR of at least 98%.
• A high figure means the company is trustworthy, and your family won’t face any difficulties in getting the money when they need it most.

7. Tax Benefits in India

Buying a term insurance policy for NRIs is an added advantage for saving on taxes in India. Right up to ₹1.5 Lakh, the premium you have paid is chargeable from your taxable income as per Section 80C of the Income Tax Act. This works well if you have rental or other income in India.

8. Nominee Details

You have to confirm that the nominee (the person who will receive the money) has a valid bank account in India. Transferring money to an Indian account is a lot quicker than doing it to an international one. If the nominee is your spouse or parent residing in India, the operation will be even more hassle-free.

9. Be Honest With Your Habits

When you are filling your form, you need to be very open about the following points:

• Smoking/Drinking: Smokers are charged with a higher premium; however, if they conceal this fact, the claim can be rejected.
• Work Profile: If your occupation is a high-risk one (such as a miner or a pilot), do not conceal it at any cost.
• Health History: Inform the company about your past surgeries and any chronic diseases.

10. Digital Access

Since you are living abroad, it is not easy for you to visit the branch office. See whether the insurance company has a good mobile app or website. Doing this, you should be able to:

• Obtain a copy of your insurance policy.
• Make premium payments.
• Change your address or phone number without having to submit physical documents.

Conclusion

Getting a term insurance plan is a way to provide your family with peace of mind. Checking the GST exemption, medical tests rules, and claim history of the company will help you choose a plan that is most suitable for an NRI.

Spend some time to compare 3 or 4 different companies. Purchase a policy from the one that has the best features for a “Foreign National” or “NRI.” Having the correct term insurance for NRI will enable you to live your life abroad without worrying about your family’s future in India.