A detailed guide on Term Insurance Plans in India for NRIs
The uncertainties of life are standard for everyone, no matter whether you are a citizen of India or an NRI. In this case, holding financial security for your family is crucial for everyone. Although there are various ways to achieve this, the best solution is to buy a term insurance plan. but here a few questions may arise such as –
Is term insurance only for the people residing in India, or can NRIs also buy it? Undoubtedly, Indian citizens have complete freedom to opt for their preferred insurance plans in a simple and easy manner. It may also not involve much paperwork. But does the same apply to the NRIs? Certainly not.
An NRI can buy a term policy as per their choice to safeguard their family’s financial future in their absence, which can also become a saving option for them. NRIs are permitted to buy term insurance plans in India if they want. But there are a few procedures and extra papers to be submitted for the same. To understand the same, here are some valuable pointers to remember.
Ways How an NRI can apply for a Term insurance plan in India
There are two significant ways through which an NRI can apply for a term insurance policy, and here they are:
- An NRI can purchase their preferred term insurance policy when visiting India. Upon completing the formalities related to the underwriting of a term policy, this term plan will be considered similar to any other policy available to an Indian citizen.
- It is also possible for an NRI to buy a term plan in the country where they are residing. This can be done via Mail Order Business. Such a term plan or insurance policy will be verified by the notary, an Indian diplomat, and official of the Indian Embassy.
Key Features of NRI Term Insurance Plans
The NRI term plans have some distinguishing key features compared to the regular ones that any individual can opt for within India. Here they follow:
- Policy Term: The tenure for an NRI term plan generally extends from 6 months to 25 years with the minimum entry age of 18 years to a maximum of 60 years of age, based on the policy type.
- Premium and sum assured: The sum assured generally varies from Rs. 2 lakhs to up to Rs. 1 crore or more based on the type of insurance policy taken. However, there is no fixed premium for the NRI term plan as it is influenced by the factors like the sum assured, riders, premium mode, and others.
- Grace period: This implies the extended flexible time to pay the premium, which is missed due to some reasons. The grace period for the NRI term plan is up to 15 days from the actual premium date to be paid.
- Renewal of the policy: Some may want to continue the term plan after its maturity. In this case, instead of going for a completely new plan and spend extra time on it, an NRI is absolutely flexible to simply renew the existing one and continue with the same till your preferred tenure. However, a few criteria need to be met before the term plan is renewed.
- Internet banking and premium payment: The NRIs have an option to pay their premium through internet banking. However, to enable this, the policyholder should have an account in an authorized bank, which allows electronic transactions to the insurance company from which the term plan is bought.
- Documents Required: Compared to the regular term plan taken by the citizens of India, the NRI may need to provide some extra documentation. Such documents may include a proposal form, age proof, health condition report, income proof, passport copy with attestation, application amount, which should be equal to the first premium, and few more additional documents. While applying your term plan via Mail Order Business, the insurance company may seek other documents according to the country you are residing in and your income in the country.
Insurance companies that offer NRI Term Insurance Plans
Almost all insurance companies provide NRI term plans. Of which there are some recognized insurance companies for the NRIs:
- Life Insurance Corporation of India (LIC)
- ICICI Prudential Life Insurance
- HDFC Life Insurance
- Kotak Life Insurance
- Max Life Insurance
With the awareness and realization of the importance of buying a term plan, many NRIs are showing more interest in it. For this, they are now in search of a reliable insurance company. There are over 20 insurance companies in India, of which some are very popular and existing for many decades, whereas few are newly emerged.
Some insurance companies also provide more extended protection for policyholders and their families, which can be extended with a life cover of up to 99 or 100 years of age. Undoubtedly, anyone who takes a term plan can enjoy peace of mind no matter if they are alive or not. Their family is now financially secured with the term plan of reasonable sum assured. This financial security is the primary factor shaking anyone’s life as a family or an individual.
The key focus and purpose of buying an NRI term plan should always be kept in mind. Remember, such plans don’t offer any return on investment; instead, they will give only good financial security to your family in your permanent absence. Therefore, choosing an insurance company that offers you all the best deals in every aspect, including premium mode, premium amount, sum assured, settlement ratio, and much more is crucial.