non-resident Indians (NRI) are increasingly turning to term plans from Indian insurers to secure their families even as they fly to greener pastures to build their careers. Premiums of Indian insurers are lower by up to 50% as compared with countries like the US, UAE, or Singapore. And on top of that, NRIs enjoy waiver of the 18% GST on term policies.
Indian life insurers offer higher coverage amounts and longer policy terms. The claims are settled in rupees, directly supporting families who live in India. The policy remains valid regardless of the insured’s place of current residence or place of demise. Over the past two years, term plans bought by NRIs have doubled, says a study by PolicyBazaar.
“Buying term insurance from India is ideal for NRIs because of affordability, global coverage and ease of buying,” says Bhavna Verma, chief & appointed actuary, IndiaFirst Life Insurance.
Savings on premium
The savings are driven by competitive pricing due to a large number of insurers in India and favourable reinsurance support. “A 30-year-old NRI purchasing a term plan in India will pay 20-50% lower premiums than they would for a similar policy abroad,” says Varun Agarwal, head of term insurance, Policybazaar.
Rupee-settled payouts
The rupee-denominated payouts remove the risk of currency fluctuations and avoid unnecessary conversion costs. “It ensures timely and hassle-free access to funds for families during emotionally challenging times,” says Verma. If the dependents are living abroad, a relative living in India can repatriate the rupee settled benefit to the respective country after paying conversion charges.
Coverage amount
NRIs should choose a pure term plan with a tenure that covers their earning years, usually up to the age of 65–70. The coverage should be at least 10 times annual income. For high-net-worth NRIs, it can go up to `7-10 crore, depending on global liabilities, inflation, etc. They should opt for globally valid term plans with no residence-based exclusions, flexible payment options such as rupee or foreign currency.
KYC documents
For KYC, NRIs have to submit their passport, overseas address proof, income documents, photographs, and OCI/PIO card if applicable. They can make rupee payments via NRE/NRO/FCNR accounts or even via credit/debit cards, ensuring full compliance with FEMA guidelines.