Living away from the home country opens up new gateways of opportunities and bright prospects. You put in relentless efforts every hour in a foreign land to provide your family members back home with the best possible safety and comfort. You plan for their big dreams and make provision for their daily expenses. But sometimes, distances can be unforgiving. Have you ever wondered how your beloved family members in India will manage their daily expenses, mounting medical expenses, or even pending loans if you were suddenly not around?
A simple term insurance plan comes to your rescue. It is a life insurance plan that protects your family members in case of any unfortunate incident. The insurance company pays your family members a certain lump sum of money in case of a valid claim.
Getting your life insured in your home country for NRIs is now a quick and easy process with no hassles.
Why Should NRIs Buy Term Plans in India?
A lot of non-resident Indians often ponder the dilemma of whether they should protect their lives in the country they currently stay in or back in India. There are numerous advantages of choosing an Indian term plan that go in tandem with your plans for the family:
Highly Affordable Premium Costs:
Getting protection from an Indian insurer comes with the perk of significantly cheaper premiums than what you may find in the Western world or the Middle East. You can get a huge cover with a relatively low annual premium.
Direct and Easy Claims for Family:
If your parents, spouse, or kids stay in India, getting a direct payout in Indian rupees becomes very convenient for them to run the household without any worries related to currency conversion or foreign bank charges.
Tax Benefits on Term Insurance:
Life insurance premiums may qualify for a deduction under Section 123 read with Schedule XV of the Income Tax Act, 2025, subject to the applicable conditions, the taxpayer’s eligibility, and the overall ₹1.5 lakh limit for specified payments. However, taxpayers opting for the new concessional tax regime under Section 202 cannot claim this deduction. The death benefit received under a term insurance policy is generally not included in the recipient’s taxable income, subject to the applicable provisions and conditions under the Income Tax Act, 2025.
Truly Worldwide Coverage:
An Indian term policy offers comprehensive global coverage. It means that you get life cover in any country that you migrate to for jobs, business, or to settle down.
Simple Steps to Choose the Ideal Cover
Choosing the right plan comes down to understanding your family’s financial requirements. Here are a few simple pointers to help you choose an appropriate cover:
Determine the Right Coverage Amount:
Your cover, or the sum assured, should be enough to take care of your income for a reasonable amount of time. A prudent thumb rule is to get a cover that is at least 10-15 times your total income. Firstly, calculate all your current liabilities, such as home loans, car loans, and credit card dues. Then, add the costs of all your future goals, such as your children’s higher education and wedding expenses. Ensure that your sum assured can clear your liabilities and help your family realize their future aspirations.
Pick an Appropriate Policy Duration:
Avoid getting a short-term cover of just 5 or 10 years, as your financial responsibilities will continue to linger. You must get a policy that covers your life until you reach your retirement age, or 60 or 65 years of age. At this age, your children will be all set to be financially independent, and your long-term liabilities will have been cleared up.
Check the Claim Settlement Ratio:
The claim settlement ratio of an insurance company represents the proportion of claims settled by the insurer compared with the claims received during a given period. While CSR can be one factor when evaluating an insurer, it should not be considered the sole indicator of claim experience. Also consider the insurer’s claim process, policy terms, exclusions, financial strength, and customer service before making a decision.
Add Helpful Rider Benefits:
Riders are additional benefits that you can buy along with your base plan at an affordable additional premium. You can go for a critical illness rider that pays out a certain sum assured in case you are diagnosed with any of the listed ailments, such as a heart attack and cancer. You can also add an accidental death benefit rider that provides an extra sum assured in case of death due to an accident. A waiver of premium rider keeps your policy alive without any further premium payments in case of permanent disability due to an accident.
Easy Digital Process to Buy from Abroad
You can easily apply for and buy your policy online without having to step out of your current home country. Most of the leading insurance companies in India follow a paperless process of:
● Fill the Online Application: You will be directed to the website of your favourite insurance company to fill out your application form and enter your basic details, such as personal information, occupation, and income.
● Complete the Medical Review: Based on your age and the sum assured that you wish to get, you can take a tele-medical test or visit an approved medical testing centre.
● Upload Key Documents: You will be required to upload your digital passport, visa, work permit, overseas address proof, and salary slips online.
● Pay Policy Premiums: You can pay your initial policy premium conveniently via your NRE, NRO account, or in the foreign currency that you hold.
Important Rules to Keep in Mind:
To keep your policy hassle-free for your family members, always abide by a few important rules:
Always Disclose Complete Details:
Always be honest about your health status, lifestyle, amount of alcohol and tobacco consumption, and your family’s medical history. Hiding or misrepresenting facts to claim lower premium instalments can backfire, as your claim can get rejected when your family needs the financial help most.
Keep Your Family Informed:
It is always a good idea to keep your primary nominee, or spouse informed about the insurance policy. They should be aware of where the digital policy bond, receipt of premium payments, and contact details of the customer care are located.
Conclusion
Choosing an appropriate term insurance plan is one of the wisest decisions that you can make for the people back home. Getting life insurance for NRI needs will ensure that you take care of your family’s financial needs, house, and future dreams irrespective of the journey that your life takes you through. Compare the wide range of term plans online and choose a comprehensive cover for your family to enjoy long-term financial safety and security.
