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Term Insurance Plans for NRI in India

Term Insurance Plans for NRI

Term Insurance Plans NRI – Term Insurance Plans offered in India can be purchased by NRI. These plans can be purchased by NRI while he or she is visiting India. NRI needs to fill up additional NRI questionnaires while buying a term insurance plan.

Term Insurance plans are a pure life insurance policy. This type of life insurance policy provides financial protection to the family member in case of unfortunate death of the policyholder. Term insurance plans are cost-effective, convenient and most popular methods to safeguard your loved ones.

If you are NRI and planning to purchase term insurance plan here is a complete guide mentioning documentation requirement and things to consider by NRI while buying a Term Insurance Plan.

Also Read – Health Insurance Plans for NRI in India

Things to consider by NRI while buying Term Insurance Plans

Premium and Sum Assured

A premium amount and sum assured are important factors to consider while buying a term insurance plan. Sum assured for NRI generally varies from 2 Lakh to 1 Cr. The premium amount depends on the term of the policy, the sum assured, payment, payment frequency etc. Few insurance companies also check for the nature of the job, country of residence while deciding premium.

Policy Term

Policy Term is the next important factor for consideration. Policy term varies from 1 year to 25 years. You need to select the appropriate term based on your requirements.

Premium Payment via Net banking

NRI prefers an option to make payment online via Net Banking or via credit card. Many policies restrict remittance only via foreign currency via NRE/FCNR account. Some policy allows payment in Indian as well as foreign currency. As NRI, you should go through terms and conditions before purchasing a term plan.

Tax Benefits

The term insurance plan purchased by NRI comes with tax benefits that are applicable only in India. NRI can not avail tax benefit in the countries where they are living.

Claim Settlement Ratio 

Before buying a term insurance policy it is important to look at the claim settlement ratio. It gives confidence that the insurance company is settling a claim on time or not delaying.

Medical Test

Few Term insurance policy requires a compulsory medical test at a certain age before buying. It is advisable to check the medical test requirement before buying it.

What are the documents required by NRI for buying Term Insurance Plan?

The documents required for an NRI to buy a term plan include:

  • Proposal form
  • Age proof
  • Income proof
  • Health condition report
  • Attested copy of Passport

An insurance company may ask for additional documents if your purchase policy from your home country. You may need to undergo medical tests on your own and bear the cost at the time of buying a policy.

Popular Term Insurance Plans for NRI

Few popular Term insurance plans for NRI are given below.

#1 Bajaj Allianz Term Insurance Plan – iSecure for NRI

Bajaj Allianz Term Insurance plan iSecure can be purchased by NRI. This term plan offers high sum assured at lower cost.

  • Eligibility: 18 years – 60 years
  • Minimum Sum Assured: Rs.2.5 lakhs
  • Maximum Sum Assured: No Limit
  • Policy Term: 10, 15, 20, 25 and 30 years
  • Maturity age: Minimum 28 years Maximum 70 years.

#2 ICICI Pru iProtect Smart

ICICI Pru iProtect Smart is next popular term plan for the NRI. This policy can be purchased online. This policy comes with additional accidental death benefits. ICICI Pru iProtect Smart is allowed to NRI only in the specific countries.

  • Eligibility: 20 years – 65 years
  • Minimum Sum Assured: Subject to minimum premium
  • Maximum Sum Assured: No Limit
  • Policy Term: 10, 15, 20, 25, 30 years
  • Maturity age: Maximum 75 years

#3 LIC Tech Term Plan

LIC Tech Term Plan is recently launched online term plan by LIC. LIC Tech Term plan can be purchased by NRI during their stay in India. This plan is allowed to be purchased only in specific countries. This plan comes with level sum assured and increasing sum assured benefits.

  • Eligibility: 18 years – 65 years
  • Minimum Sum Assured: 50 Lakh
  • Maximum Sum Assured: No Limit
  • Policy Term: 10 to 40 years
  • Maturity age: Maximum 80 years

FAQ about Term Insurance Plans for NRI

Term plans are allowed for NRI for specific countries only?

Yes, most of the insurance companies restrict availing term plans for the country of residence. This means NRI will be able to purchase a term plan only in the specific countries.  E.g ICICI iProtect Smart allows specific countries such as Hong Kong, Malaysia, UAE, New Zealand, Australia, Singapore, Canada, Norway, Philippines and Shri Lanka only.

How to pay life insurance premium from abroad?

NRI can make premium payments via internet banking or via credit card. The payment is allowed in local currency as well as foreign currency. NRI can use NRO account to make payment in Indian currency and NRE/FCNR account to pay in the foreign currency.

How sum assured will be paid to nominee?

In the event of the death of the policyholder, the sum assured is paid to the nominee in their NRE account. The amount received as claim settlement is repatriable to the home country. The amount that can be repatriable is restricted to the premium amount paid in the foreign currency. If a premium is paid in the Indian currency via NRO account, the death benefit is not fully repatriable.

What are additional documents required in case of death outside India?

In case of death of policyholder outside India, additional documents required to produce by the nominee are employer certificate, copy of death certificate verified by Indian Embassy, Embalming Certificate and translation of documents if the original is not in English.

Shitanshu Kapadia
Shitanshu Kapadia
Hi, I am Shitanshu founder of moneyexcel.com. I am engaged in blogging & Digital Marketing for 10 years. The purpose of this blog is to share my experience, knowledge and help people in managing money. Please note that the views expressed on this Blog are clarifications meant for reference and guidance of the readers to explore further on the topics. These should not be construed as investment , tax, financial advice or legal opinion. Please consult a qualified financial planner and do your own due diligence before making any investment decision.