NRI Meaning and Indian Insurance Services

There is debate and confusion around the terms NRI, PIO and OCI. With increasing globalization the frequency of the usage of these terms is only increasing. What exactly do they mean ? How exactly are they different from each other ? These terms also lead to specific guidelines and rules regarding services in India. We are here to clarify the NRI meaning and Indian insurance services for NRIs.

NRI Meaning and Indian Insurance Services
NRI Meaning and Indian Insurance Services

NRI Full Form 

The full form of NRI is Non Resident Indian. 

NRI Definition 

  • An Non Resident Indian (NRI) is an Indian Citizen who resides in India for less than one hundred & eighty two days during the course of the preceding financial year
  • Or who has gone out of India or who stays outside of India due to employment
  • Or who has gone out of India or who stays outside of India to conduct a business or vocation outside of India
  • Or who has gone out of India or who stays outside of India for any other purpose indicating his/her intention to stay outside India for an uncertain period.


These three terms are often confused for each other. Let us define each one clearly. 


A Non Resident Indian is an Indian citizen who resides in India for less than one hundred and eighty two days during the course of the preceding financial year.


The full form of OCI is Overseas Citizen of India. This is for people of Indian origin who live in foreign countries except for Pakistan and Bangladesh.


A Person of Indian Origin (PIO) is a foreign citizen (except a national of

Pakistan, Afghanistan Bangladesh, China, Iran, Bhutan, Sri Lanka and Nepal)

  • who at any time held an Indian passport
  • Or who or either of their parents/ grandparents/ great grandparents was born

and permanently resident in India as defined in Government of India Act,

1935 and other territories that became part of India thereafter provided

neither was at any time a citizen of any of the aforesaid countries ( as referred


  • Or Who is a spouse of a citizen of India or a PIO

NRI Definition per Income Tax Act of India

U/s 6 of the IT Act, 1961, an individual who is an Indian Citizen or is of Indian origin, is considered to be an NRI.

  • If an individual’s taxable Indian income exceeds Rs 15 Lakh then that individual is considered to be a resident, in case the person:
  • Visits India for 120 days or more in the preceding year
  • Has been in the country for a period of 365 days or more in the previous 4 years.

Eligibility for NRIs in Legal Indian Activities

In order for NRIs to engage in legal Indian activities, they have to have the following:

  • Indian Passport: An NRI must hold an Indian passport issued by the government of India.
  • NRIs need to be citizens of India as per the Act of Citizenship, 1955. Parents or grandparents need to be citizens of India. You, your parents or your grandparents must be Indian Citizens.
  • You have to be the spouse of an Indian citizen or of a person with the above mentioned criteria. 

Insurance in India for NRIs

An Indian insurance policy provides financial security for the policy nominee, if the life assured passes away during the validity of the policy. It provides financial security and also assists with the needs of your family.  

  • Term insurance offers the highest returns with minimal premiums. 
  • It is a cost-effective and long term plan.
  • Indians and NRIs can both apply for this

One can avail of the policy in two ways 

  • You can purchase the policy when you are visiting India. After the legal formalities have been processed, your claim will be handled like any other Indian citizen’s claim.
  • You can also order the policy from where you are living via mail order. A notary, an Indian Embassy official and an Indian diplomat will verify your policy. Students can also have theri dean provide verification 

Features and Policies of Insurance Plans for NRIs

The terms and conditions for insurance plans for NRIs can be a bit different than that of normal Indian citizens. 

1. Policy Term for NRIs

  • Policy term can range from 6 months to 25 years
  • Insurance is available from the age of 18 to 60
  • The policy terms is subject to the terms and conditions of the policy

2. Premium for NRIs

The premium on the NRI insurance policy is not fixed. The premium which is the initial payment depends on a multitude of factors such as:

  • Policy Term
  • Cover Amount Assured
  • Regulation of Premium Payment 
  • Riders’ Options 

3. Amount Assured for NRIs

The amount assured on an NRI term can range from lacks to crores. The assured amount goes to the insured’s NRE account when they pass away during the course of the insurance policy.

4. Grace Period for NRIs

There is a grace period for NRI policies if the date to pay the premium has been missed. If the premium amount required is paid during the grace period, the policy will not be terminated. 

5. Policy Renewal for NRIs

There are some insurance policies that may provide policy renewal options upon maturity. In order to be eligible for this the insured must undergo a number of tests based on their health.Your record must also indicate no setbacks or dues in the premium payment.

6. Premium Amount Payment for NRIs

NRIs can pay the premium amount through internet banking. This requires:

  • Policyholder must have an account in an approved bank
  • Online payment modes include: Settlement in foreign currency, an NRE/FCNR bank account and an NRO bank account.

7. Tax Benefits for NRIs

  • NRIs receive tax benefits under Sec 80 D of IncomeTax in India, the same way Indian residents do. Some countries may charge tax on maturity earnings.

Required Documents for NRIs

The insurance company may ask for documents such as:

From for the proposal

Proof of Identity

Passport copy with attestation 

Report on Health Status

Mail order may require extra documents such as:

  • Application Form
  • Passport Copy
  • Proof of Income
  • Proof of age and address

Health Report 

There are two options for this. The medical examinations can be done in India or where you live. Several insurers may fix the premium and coverage amount based on this. 

The Insurer can confirm the rest of the documents that may be required. 

To ask any question related to NRI investment in India, you can download SBNRI App from the Google Play Store or App Store. You can also use the SBNRI app for investment in stock market/ mutual funds, Pre-IPO, Asset Finance, Commercial Real Estate, Indian Startups Funds, NRI account opening, etc. To ask any questions, click on the button below. Also, visit our blog and YouTube channel for more details.

Ask Indian Friend Now

Does India allow dual citizenship ?

No, India does not allow dual citizenship.

What is the full form of NRI ?

Non Resident Indian.

Can NRIs hold a resident  account in India ?

No. This is not permitted. NRIs must have an NRI account.

Do NRIs pay tax ?

NRIs have to pay tax if their income exceeds Rs.2,50,000 annually. NRIs in India only have to pay tax if the income has been earned in India, 

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