Term Insurance For NRI Guide 101
Term insurance is the simplest way to ensure your family's financial stability. Your financial responsibilities will undoubtedly grow as you grow in your job and family. Term life insurance provides a cushion to allow your family to pursue their ambitions without worrying about the financial consequences if you are not present or in case you unfortunately pass away. While we talk about domestic Term insurance for NRI, term insurance for NRI is equally important. In this article, we will talk about term insurance for NRI and its aspects.
Who is a non-resident Indian (NRI)?
Many Indians currently have jobs across the world. Some are placed overseas for a few years before they return to India. Many others spend a few months working overseas before returning to India for the rest of the year. A "Non-resident Indian" is defined as someone who has not lived in India for a specific number of months in a year.
Can NRIs buy a term insurance policy?
NRIs can get a term policy that suits their needs. Their individual presence in India at the time of purchasing a term insurance for NRI is unnecessary. Even in policies that require a medical examination, a certified report from an authorised medical expert in the country where the applicant already resides is sufficient.
Why Is Term Life Insurance Important for NRIs?
In many families, the principal breadwinner is an NRI who works abroad. The remittances received cover the family's costs and help them save for the future. However, if an NRI family member unfortunately passes away for any reason, the financial consequences would be significant. Aside from the emotional distress, the financial weight and uncertain future might completely ruin the family. To protect the family from such distressing situations, it is recommended that the non-resident buy life insurance in India.
How Can NRIs Maintain Their Insurance Coverage?
One of the worries that NRIs usually have is how their family will be taken care of in their absence. One of the ways to protect them is to buy term insurance for NRI for them. Have you ever wondered what will happen to term insurance after you become a non-resident? Well, the policy will continue to run if the premiums are paid without any break.
How Can NRIs Pay Premiums for Term Insurance Policies?
It is always preferable to perform your term insurance transactions online. With the wide access to digital banking channels, NRIs can pay their premiums on time using international credit/debit cards or amounts from their NRO account. You can also pay the payment in one single sum if the policy allows it.
What Documents Do NRIs Need to Submit When Purchasing a Term Plan in India?
Term insurance in India for NRIs can be simply purchased through the insurance company's website or an insurance aggregator. The following documentation should be provided when acquiring the term insurance for NRI:
- An attested copy of the passport
- Proposal form properly filled out
- Identity and address proof (local and international)
- Provide a copy of your income or earnings statement, as well as a certified medical report from a trained practitioner if a health check-up is required.
Along with these documents, the first premium for the coverage should be paid to the company. Aside from these documents, the insurer may want some further documentation.
What are the key features of term plans issued in India to NRIs?
An employee employed overseas must have term insurance coverage in place to protect their family in the event of an unfortunate event. You should complete the online term insurance for NRIs process while you are in the nation on vacation or with family or before moving abroad. However, there are a few crucial factors that NRIs should consider before purchasing a term insurance plan.
Country of residence: Insurance firms allow their policies to be valid in multiple countries while excluding a few where coverage is not available. As a result, the NRI must confirm whether the insurance provider they have chosen provides coverage in the country of residency.
Obligation to provide complete medical history: The NRI candidate must declare any lifestyle habits, pre-existing ailments, and other vital information about their health state. If any deception or suppression is uncovered later, the policy may be voided.
Duty to notify the insurer about going abroad: If the policyholder intends to relocate to a foreign country for an extended period of time, they must notify their insurance company. Such disclosure must ensure that the coverage is available in the other nation or is changed appropriately.
Important Aspects of Term Insurance for NRI
- Coverage is indeed provided for death across the globe. However, if it is in a third-world country, the scrutiny is more detailed, resulting in a minor delay in the disbursement.
- The processing period for term insurance plans for NRIs is slightly longer (about 30 days) than for ordinary situations (approximately 15 days).
- Riders on term insurance for NRIs are not given by all term insurers, with only a few companies offering specific, if not all, riders.
- There is a cap on the coverage available to NRIs. This restriction is in place to protect the risk of term insurers.
So we are saying
The need for term insurance has always been apparent in the financial support it provides to the family of a deceased person. The need is especially significant for non-resident Indians who live and work in foreign and faraway places. NRIs can protect their families back home from financial difficulty by purchasing the appropriate amount of coverage and riders based on their unique needs.
