5 Points NRIs should Consider for Life Insurance in India

Indian citizens living abroad can boost their finances by purchasing life insurance plans in India. Several Insurance companies offer customized life insurance plans to fulfill the needs of NRIs, such as SBI life insurance for NRIs, Max life insurance for NRIs, ICICI Prudential life insurance, etc. Insurance plans, eligibility criteria, and other terms and conditions are slightly different for NRIs from resident Indians. Here are the 5 points NRIs should consider before buying life insurance in India. 

5 Points NRIs should Consider for Life Insurance in India
5 Points NRIs should Consider for Life Insurance in India

Also Read: Why NRIs need life insurance policy in India?

5 points NRIs should consider before buying life insurance in India

Check your eligibility 

NRIs (Non-Resident Indians) and PIOs (Persons of Indian Origin) who want to buy life insurance in India need to fulfill certain conditions. NRIs are Indian nationals residing abroad for a certain duration. PIO is a foreign citizen who meets any of the following eligibility criteria:

  • An individual who held an Indian passport at any time in the past. 
  • An individual who is a spouse of an Indian citizen.
  • A person whose parents/ grandparents were a citizen of India as per the Constitution of India or the Citizenship Act, 1955. 

Note: To purchase life insurance in Indian, NRIs should have a valid passport issued by the Government of India. 

Opt for an insurance company 

If you have qualified to buy NRI life insurance in India, you need to find the right insurance company in India. More than dozens of insurance companies offer a suite of NRI insurance plans. A few insurers have restructured their processing of issuing insurance plans for NRIs. When concluding a product, keep important factors in your mind such as the track record of the company, pedigree of the management, claim settlement ratio, and parent group’s experience. 

Some of the NRI life insurance companies include SBI life insurance for NRIs, Max life insurance for NRIs, ICICI Prudential life insurance and Reliance Nippon Life Insurance for NRIs. NRI life insurance policies can be both affordable and comprehensive. All you need to do is explore your options carefully before buying life insurance in India. 

Check for tax implications 

Investment in insurance is subject to tax implications. Hence, you are advised to go through tax laws in force in India and the country of your residence before buying a policy. There will be tax implications at three stages of the policy life cycle – investment, accumulation and maturity. While all stages are exempt from tax laws in India, check for the same in your country of residence. You can consult tax experts to understand the tax related queries before purchasing a life insurance policy in India. 

Check the method of premium payment

Check the mode of payment of premium in advance to ensure you don’t face any problems in the future. There are mainly two ways to make a premium payment. In the case of foreign currency-denominated policies, you can pay the premium in a foreign currency or through your NRE/ FCNR account, and in the case of rupee-denominated policies, you can pay premiums using your NRO account. 

Here are the key features of NRE, NRO and FCNR accounts:

ParticularsNRE (Non-Resident External) AccountNRO (Non-Resident Ordinary) AccountFCNR (Foreign Currency Non-Resident ) Account
Ideal for NRIs to deposit their foreign earningsNRIs to deposit their India-based income such as pension, dividends, rental income, etc.For NRIs to make foreign currency investment in India without taking currency risk
Account typesSavings, current, Fixed DepositSavings, current, Fixed depositFixed deposit only
Currency of depositINRINRAny of USD, GBP, EUR, JPY, CAD, AUD, SGD, HKD and CHF
Tax deductionNo taxTaxableNo tax
RepatriationFully repatriabilityUp to $1million each financial yearFull repatriability
NRI account types

Medical examination procedure

Medical examination procedure is one of the most important 5 points NRIs should consider before buying life insurance in India. You need to go through a medical examination to buy a life insurance policy. You need to come to India for a medical test for which the insurance company will bear the expenses. Alternatively, you can conduct the test overseas and send the report to the insurance company in India, for this you will have to pay the expenses, if the insurer has not tied up with an overseas medical facility provider.

Conclusion: How to choose life insurance as an NRI

A careful examination of the insurer’s policy along with fine prints is necessary to select the best life insurance for NRIs. NRIs can select from plans which offer regular income benefits to the dependents. 

Also Read: How to choose term insurance as an NRI (Non-Resident Indian)

Top 6 Retirement Mistakes made by NRIs

At SBNRI, we understand that there are many obstacles faced by NRIs while trying to buy life insurance in India. You can download SBNRI App to connect with our experts and get end-to-end assistance related to insurance policies for NRIs.

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