Term insurance is a crucial financial tool for providing financial security to your loved ones in case of your untimely demise. For Non-Resident Indians (NRIs) who have family members in India, purchasing term insurance can be a prudent decision to ensure their financial well-being. Here, we will explore how NRIs can buy term insurance in India, the key considerations, and the process involved.
Understanding Term Insurance for NRIs in India
Term insurance for NRIs in India operates similarly to term insurance for residents, offering a death benefit to the nominee in the event of the policyholder's demise during the policy term. However, there are certain considerations and eligibility criteria NRIs need to be aware of before purchasing term insurance in India.
Eligibility: NRIs are generally eligible to purchase term insurance in India, subject to certain conditions set by insurance companies.
Policy Tenure: Term insurance policies for NRIs typically have a maximum tenure, often up to 25 or 30 years, depending on the insurer.
Premium Payment: NRIs can usually pay premiums in Indian rupees through various channels such as NRE or NRO accounts, foreign currency cheques, or online payment gateways.
Steps to Buy Term Insurance for NRIs in India
Purchasing term insurance for NRIs in India involves several steps, from choosing the right policy to completing the documentation process. Let's break it down:
Research and Choose a Policy
It is crucial to conduct thorough research to understand the available term insurance plans offered by different insurance companies in India. Consider factors such as coverage amount, premium affordability, claim settlement ratio, and additional benefits (such as riders).
You may also browse through the various types of term life insurance plans and compare their features and benefits. It can help you make an informed decision.
Check Eligibility and Documentation
Ensure to meet the eligibility criteria set by the insurance company for NRIs. Prepare the required documents, including proof of identity, address proof, income proof, and overseas address proof.
Some insurers may require additional documents such as a copy of the passport, visa, and employment details. You may like to check the required documents for NRIs when buying term insurance, so your experience may be smoother and hassle-free.
Calculate Premium Using Term Insurance Calculator
Use a term insurance calculator to estimate the premium amount based on your age, coverage amount, policy tenure, and other factors. These calculators, often specific to the plan, are easily available on the insurer website or the official app.
Adjust the parameters to find a premium fitting your budget and providing adequate coverage for your family's needs.
Apply for the Policy
Fill out the application form accurately, providing all the necessary details and documents. Review the terms and conditions of the policy, including the coverage, premium payment frequency, and exclusions.
Submit the application along with the required documents through online channels or by visiting the nearest branch office of the insurance company.
Underwriting and Medical Examination
The insurance company will assess your application based on factors such as age, health condition, lifestyle habits, and occupation. Depending on the insurer's underwriting process, you may be required to undergo a medical examination to evaluate your health status.
It is ideal to cooperate with the insurer and provide accurate information to facilitate a smooth underwriting process.
Policy Issuance and Premium Payment
Upon successful completion of the underwriting process, the insurer will issue the term insurance policy. Review the policy document carefully to ensure all the details are accurate and match the terms agreed upon.
Make the premium payment through the designated channels as per the chosen premium payment frequency (annual, semi-annual, quarterly, or monthly).
Benefits of Buying Term Insurance for NRIs in India
Purchasing term insurance in India offers several benefits for NRIs and their families:
Term insurance provides a lump sum amount (death benefit) to the nominee in the event of the policyholder's demise, ensuring financial security for the family members left behind.
Term insurance premiums in India are considered to be cost-effective as compared to other types of life insurance policies, making it an attractive option for NRIs looking for relatively affordable coverage.
When filing income tax in India under the old tax regime, NRIs can avail tax benefits on term insurance premiums paid under Section 80C of the Income Tax Act. Exemptions are not available if you have opted for the new tax regime.
Term insurance for NRIs in India offers a convenient and effective way to safeguard the financial future of their loved ones. By following the steps outlined above and choosing the right policy, NRIs can ensure their family members receive financial support in their absence. With its range of benefits offered, term insurance provides peace of mind to NRIs living abroad, knowing that their family's financial needs will be taken care of.
** Tax exemptions are as per applicable tax laws from time to time.
Disclaimers:
Disclaimers: IndiaFirst Life Insurance Company Limited, IRDAI Regn No.143, CIN: U66010MH2008PLC183679, Address: 12th & 13th floor, North Tower, Building 4, Nesco IT Park, Nesco Centre, Western Express Highway, Goregaon (East), Mumbai – 400 063. Toll free No – 18002098700. Email id: customer.first@indiafirstlife.com, Website: www.indiafirstlife.com. Fax No.: +912268570600. IndiaFirst Life Insurance Company Limited is only the name of the Life Insurance Company and ________________ UIN ____________ is only the name of the Life Insurance Product and does not in any way indicate the quality of the contract, its future prospects, or returns. For more details on risk factors and terms and conditions, please read the sales brochure carefully before concluding the sale. Trade logo displayed above belongs to our promoter M/s Bank of Baroda and is used by IndiaFirst Life Insurance Co. Ltd under License. Advt.
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