Life Insurance for Non-Resident Indians (NRIs) refers to insurance policies that are designed to meet the financial coverage needs of Non-resident Indians and their loved ones. Even if a person is temporarily residing abroad, he/she can obtain these insurance plans from any reputable life insurance provider in India. However, it’s vital to note that an NRI life insurance policy is typically subject to the norms and compliance with the Foreign Exchange Management Act (FEMA) standards and other key regulations set by the Insurance Regulatory and Development Authority of India (IRDAI).
Check out this article to learn more about the insurance options for Non-Resident Indians and their eligibility criteria.
Types of Life Insurance Policies for NRIs
Non-Resident Indians who wish to purchase a life insurance plan have a multitude of options to choose from based on their personal needs and life stage.
That said, here are the most common types of life insurance plans available for NRIs in India:
- NRI Term Plans: NRI term life insurance provides a death benefit similar to term plans for resident Indians. These protection plans pay the sum assured in case the insured does not survive the policy term. Additionally, leading life insurance companies offer non-resident Indians the option to purchase riders or add-ons for the term policy, such as critical illness cover, disability cover, and accidental death coverage, to increase the overall coverage.
- Child Plans for NRIs: NRIs can buy insurance plans designed to safeguard the future of their childer in case of their untimely death. These insurance plans help NRIs to save funds so that they can meet important life objectives, like higher education, for their children. NRI life insurance plans may also include add-ons, such as waiver of premiums, to help manage financial responsibilities in the event of the policyholder’s death.
- Retirement Plans: These insurance plans enable NRIs to put money into retirement plans that help generate a steady stream of income through pension plans or annuities after they retire. NRI insurance policies directed toward retirement can assist policy buyers in planning for their financial security even after the retirement of the policyholder. Individuals can use a term life insurance calculator for NRIs to determine if the sum assured would be adequate to meet their retirement goals.
- Unit Linked Insurance Plans or ULIPs for NRIs: ULIPs blends the best of life insurance coverage with investment benefits, making a lucrative investment option for many. NRI ULIPs function similarly to the ULIPs designed for Indian citizens. To elaborate, if the policyholder passes away during the active policy term of the insurance, the death benefit extended by the insurance policy is paid to the insured’s family members. Alternatively, if the insured individual outlives the policy term, they are entitled to receive returns on the basis of their investment units linked to the insurance policy.
Eligibility of Insurance Policy for NRIs
Apart from local Indians, several categories of insurance applicants can buy NRI life insurance plans. Read along to check the eligible list of the NRIs –
- Non-Resident Indians: Indian national citizens with valid Indian passports who happen to be temporary residents of other nations.
- Overseas Indian Citizens or Persons of Indian Origin: Nationals of countries except Pakistan and Bangladesh who meet certain criteria, such as having parents or ancestors who are Indian citizens and having possessed an Indian passport before.
- Foreign Nationals: Nationals of other nations residing in India. However, the qualifying requirements to avail of an insurance policy may vary depending on the insurance company and certain nations may have a few restrictions.
Documents Required to Purchase Life Insurance Plans
The documentation process followed to purchase life insurance policies for NRIs in India may differ from that practiced for resident Indians.
However, here’s a list of the common documents that are requested to initiate Know Your Customer (KYC) compliance –
- National Identity card or a resident card that has been issued by a foreign government like an NRI applicant’s passport with a foreign address.
- Driving license featuring an overseas address.
- At least three-month-old utility bills or credit card statements with a valid overseas address.
- At least a three-month-old copy of a resident permit or a work permit with a valid overseas address.
- Employer’s certificate that will be accepted as proof of overseas address.
In addition to these, an NRI applicant will be asked to submit his/her proof of age, copy of passport, income proof, and even current
medical records as required.
Advantages of Getting a Life Insurance Policy NRIs
There are several advantages of purchasing a life insurance policy in India that is meant for Non-Resident Indians:
- Financial Security for Insured’s Dependents: Life insurance for NRIs would ensure that dependents of the insured are financially protected in the event of his/her untimely demise. This is because the sum assured will serve as a source of income.
- Mitigation of Outstanding Debts: Life insurance policy meant for NRIs will help alleviate the burden of existing debts of the policyholder. This will help prevent any kind of negative impact on the quality of life of the NRI applicant’s dependents.
- Investment Diversification and Accompanying Tax Benefits: NRI life insurance policies help insured individuals to diversifying their investment portfolio. They also provide tax benefits that help NRIs lower their applicable tax benefits and help in better financial planning.
- Creating a Long-term Fund: Life insurance plans designed for NRIs help create a long-term corpus that can help individuals meet their financial goals. Furthermore, it helps build wealth so that they and their loved ones can lead a comfortable life.
To maximize the benefits of life insurance policies designed for NRIs, it is very important to obtain them from trusted insurance companies. Furthermore, availing of an NRI life insurance policy from a notable institution ensures prompt and guaranteed claim approval, as well as a reliable aid for any kind of queries or concerns.
That said, it is always recommended to compare different NRI insurance plans so that they can pick the best insurance plan that will offer them life cover. Additionally, they should check the limitations on each policy as the ones levied on insurance plans for Indian citizens may vary from the ones applicable to NRIs.