If Non-resident Indians (NRIs) wish to buy a policy in India, they don’t have to be present in their native place. Therefore, it is easier to buy a policy in India than purchasing it on another land.
Formalities while buying a policy abroad could be a bit lengthy as the eligibility to buy a term insurance policy and premiums depend upon an NRI’s country of residence. If you are residing in a politically unstable country, the premiums are likely to be higher.
Before buying a policy in your host country, make sure that you know the following things about the term insurance policy.
Necessary Requirements
Before buying a policy in your host country, you need to look at the insurance companies. The policy term can vary between six months and 25 years. Some insurers even provide a whole life policy for NRIs. Though some insurers may provide lifetime policies, some might hold telemedical exams. So, you must submit the relevant documents. You have to bear the costs for the tests done outside India.
Payment of Premium
You can pay for your premium of policies that are issued in Indian currency through your non-resident ordinary (NRO) account. If you buy it through foreign currency, you can also pay for premiums via non-resident external (NRE) and Foreign Currency Non-Resident (FCNR) accounts, Society for Worldwide Interbank Financial Telecommunications (SWIFT) transfer or an international credit card.
If your family lives in India, then make sure you pay for the premium through the insured’s bank account in India.
As premiums mostly do not vary for Indian residents or non-residents, they are based on post evaluation of risks associated with insuring a person: health, finance and country.
Claim Benefit
Once you issue a term policy, any insurance company in India will cover death irrespective of your country of residence. The nominee of the policy will have to submit all necessary documents listed by the insurers to submit the death claim. Taxes and tax benefits on the policy, however, are based on the tax laws prevailing in the country where you live currently.
