Term insurance is a type of insurance that pays out following the demise of a policyholder during the policy term. If the policyholder survives the term, the insurance will not have a maturity value, which keeps premiums for term insurance extremely low in contrast with other types of insurance policies. Anyone whose family is financially dependent on him or her can benefit from buying the term insurance.
In India, non-resident Indians (NRIs) and persons of Indian origin (PIOs) are allowed to buy these policies. But before buying term policies, you must know a few things listed below.
Benefits
Term insurance policies for NRIs and PIOs usually have tenure from 6 months to 25 years. The minimum age for buying NRI insurance is 18 years and the maximum age is 60 years. However, the maximum age depends on the terms and conditions stated in the policy.
Premium and Sum Assured
Sum assured for NRIs and PIOs term plan varies from a minimum of Rs 2 lakhs that goes up to Rs 1 crore. There is no fixed premium as the amount of premium depends on the following factors like the term of the policy, sum assured, payment frequency of premium and the riders if opted for any. In case of the death of the policyholders, the sum assured is paid to the nominee in their NRE account.
Grace Period
In case an NRI misses the due date of premium payment, there’s a feature called a grace period, which is offered for the same. If he is able to pay the pending premium during this period, his policy will not be abolished. The grace period for a policy with a premium payment frequency of 6 months or 12 months is 15 days.
Policy Renewal
There are quite a few term insurance policies that allow the renewal of the policy at the time of maturity. This requires the insured to pass through some tests associated with health for meeting the criteria of renewal. Also, the policyholder must have a good track record like no dues or delays in payment of premium on the date.
Premium Payment through E-banking
NRIs also have the option of paying premiums through internet banking. For that, the insured requires to have an account in any of the authorised banks that offer e-transaction to the insurance company. Before opting for this service, NRIs and PIOs must be well informed about all the terms and conditions that come with banking while making a premium payment. There are various payment modes like remittance in foreign currency, NRO bank account, NRE/FCNR bank account.
How to Buy Term Insurance?
As an NRI or PIO, you can buy term insurance in two ways:
You can purchase the policy whenever you are visiting India. Once the formalities are completed regarding the underwriting of the insurance policy, it will be considered as any other policy availed by a citizen of India.
You can even purchase the policy in the country via Mail Order Business. The policy is verified by a notary. An Indian diplomat, Indian embassy official and students can even approach the dean or supervisor for verification.
Required Documents
- Proposal form
- Age proof
- Income report on the health condition
- Attested passport copy
- Application amount, which is equal to the first premium
Companies that offer term plans to NRIs and PIOs are Life Insurance of India, ICICI Prudential Life Insurance, Max Life Insurance, Kotak Life insurance, etc.
