Why a term plan from India is the most feasible option for NRIs

In one’s financial planning journey, term insurance is perhaps the most critical element of their investment portfolio. The reasons are many –primarily, it provides financial security for the loved ones in the event of the policyholder's death. It can help pay for regular expenses as well as cover long-term debts and provide a source of income for the deceased’s family.

Rhishabh Garg, Head- Term Insurance, PolicyBazaar.com, says, “Knowing that your loved ones will be taken care of in your absence provides a great deal of mental peace. While mental peace is paramount for everyone, it becomes especially relevant if you stay away from your native land. Just like it is vital for consumers residing in India, term insurance is equally important, if not more, for NRIs. In the event of unanticipated events like illness, injury or death, it can offer financial shield and ensure that their family’s future is not compromised.”

He further adds, “However, staying in a foreign country doesn’t mean that they have to necessarily buy the policy from that very country. It is financially wiser for NRIs to purchase term insurance from India. Term insurance policies available in India are a lot more cost-effective and provide more extensive coverage than those offered in other nations. By paying a comparatively lower premium, NRIs can purchase a term plan that offers a high amount of life cover”.

Particularly, when it comes to NRIs residing in developed nations, the price differential in some instances might be as high as 50 to 60 per cent. A term insurance policy purchased from Singapore or the UAE, for example, would cost 40 to 50 per cent more than one purchased from India. This becomes possible because of relatively lower re-insurance rates and additional GST benefit of up to 18 per cent. With abundant of options available from multiple insurance companies, Indian insurance market provides a range of products to meet a range of requirements and price points.

Indian insurance companies design their products with Indian consumer in mind, in contrast with plans in other countries (like the NRIs’ host nation) which are created with their residents in mind. In fact, Indian insurers have products specifically for NRIs which are carefully designed keeping their needs in mind. Hence, insurance plans purchased from an Indian insurer may be a better fit for an NRI’s specific insurance requirements, such as protection against critical ailments, or benefits for nominees who are residing in India.

Indian term plans also make more sense for NRIs who have family members residing in India, because of higher comfort when dealing with local insurance providers for claim settlement.

Planning a trip to India is no longer required for NRIs who want to purchase a term plan. The ability for NRIs to purchase a term plan from India while residing in their host country has been made possible with the introduction of tele-medical or video medical examinations. Simply put, an NRI does not have to be physically present in India in order to purchase a term plan. With the simple issuance procedure made possible by video-medicals, they can quickly purchase a term plan from any location in the world.

When the pandemic first started, the underwriting guidelines were stricter and policy buyers had to submit to physical examinations. The coverage sums were restricted. But now that laws and regulations have been relaxed, NRIs can get substantial covers with tele-medical checks within a few clicks and through online payment.

Insurers have also started to tie-up with local service providers to enable medical check-ups at home, without any additional cost to the customer.

Purchasing term plans from India also offer NRIs other benefits like coverage for terminal illnesses wherein they get a lump sum payout in case of the diagnosis of a terminal illness. They can also opt for long-term coverage that provides protection even for as long as 99 years. Accidental death benefit rider is also available that offers an extra sum assured and provides additional protection in case of accidental death, irrespective of where the policyholder resides.

To sum up, buying insurance from India offers NRIs complete financial security that they require at an affordable price. It does not matter that they are living away from home. Geographical restrictions no longer prevent NRI clients from purchasing term insurance plans in India. The ability to schedule a video or tele-medical check-up from their home country is now easily available through term plans in India. Especially amid recurrent Covid surge, they can buy a plan without having to physically travel and expose themselves to any risk. So NRIs need not postpone making this crucial decision until their subsequent visit to India.