A term plan is as critical a requirement for non-resident Indians (NRIs) as for people living in their home country. It is all the more crucial for NRIs who might be away from their roots but would want to shield their family. With a term plan, you ensure that your loved ones are not burdened with financial liabilities even if you are not around.
Buying in India versus abroad
NRIs can buy a term insurance plan from India, or from the country that they reside in. There are pros and cons for both, but term plans in India are designed keeping the requirements of the Indian population in mind, whereas plans in their country of residence are designed with their citizens in mind.
The add-ons or riders that can be bought for a bit of extra premium are also designed to provide an extra layer of security keeping specific needs in mind. So, the features of the plans available in India would be more aligned with the needs of NRIs. A term plan from an Indian insurer makes a lot of sense to provide financial protection for their Indian family, especially if the NRI is the sole or the primary breadwinner. There are, of course, other reasons too.
Affordability: Term plans in India are way more affordable than abroad. In fact, by purchasing a plan from India, NRIs living in UAE or Singapore can save up to 50-60% in premium cost. Similarly, those living in America and Europe may have to pay two to three times more for the same coverage if they buy a plan in their country of residence. Also, there is a GST waiver for NRIs, saving them 18% in taxes. But the most important reason for affordability is the constant innovation by Indian insurers, which has led to a plethora of options for different needs at different price points.
Accessibility: Earlier, NRIs could purchase a term plan from India only when they visited the country. But nowthey can do it while residing abroad through e-KYC, tele-medical examination and video verification. They can fill out an online form, and make the payment through internet banking or any foreign cards. The best part is that they have the option to pay in their local currency or Indian rupee, whichever way the conversion rate is better. This would be followed with a video-based examination to learn about their medical history and current health. And the policy would soon be issued.
Customisation: NRIs can customise the plan based on their specific needs by opting for add-on covers at very affordable rates. Moreover, these plans also offer the ease of claim processing and the payout is delivered without any hassle to their family in India. And if the nominees live abroad, the sum assured can be repatriated without any trouble as well.
It would be an uphill battle for them to raise a claim in a foreign country and receive what is owed to them. By purchasing a term plan from India, you can make it easier for them.
The writer is head, Term Insurance, Policybazaar.com. Views expressed are personal.