Life insurance is critical for all as it gives monetary security and financial cushion in the event of some emergencies. Not only for Indian residents but even for Non-Resident Indians (NRIs), the life insurance policy can be a significant aspect to protect their dependents during various phases in their absence. Now, let us understand whether they require insurance or not.
Should NRIs Opt For Insurance In India Or Not?
An NRI has a tough time dealing with one question, should I go for Insurance in India or abroad? The answer might not be clear cut but they should keep these below-mentioned factors in mind before coming to a conclusion.
- The financials involved in the insurance differs from country to country. It eventually boils down to the insurance company with regard to getting an economical plan
- In the event of death or maturity, income generated from life insurance does not get taxed in India. However, in a foreign country, the situation might be totally different. For example, the principal does not come under the ambit of tax, however, the interest accrued gets taxed in the US.
- As for India, the insurance cost, age, general health, occupational hazard, etc. are no different for NRIs from residents.
Now, an NRI should ideally take a call regarding the purchase of an insurance policy. But there are enough reasons for them to opt for a policy as well. So, what are they?
Reasons For NRIs To Opt For An Insurance Plan
For NRIs a perfect insurance plan takes good care of their loved ones including parents, spouses and children residing in India and the same should provide these:
- Stable and assured income for dependents
- Multiply their and their spouses’ wealth
- Encompassing children’s education
In case an NRI wants to purchase an insurance policy, he or she must know about the perks various policies offer. Prior to opting for one, he or she should compare numerous life insurance policies meant for NRIs offered by Indian companies.
To clarify with an example, life insurance is invariably backed up by a child plan for the smooth education of your children. The dependents receive the lump sum in case of the demise of the policyholder and the insurance company then pays the premiums of the policy going forward on behalf of the policyholder.
So, an NRI should opt for an Indian insurance policy if he or she has a secured and well-paid job abroad, no two ways about it.