Insurance for NRIs

Most individuals require 4 types of insurance.

1. Life Insurance
You require life insurance if and only if there are people who are dependent on your income stream, or on whom any liabilities you have will devolve in your absence.

So for example, if you have a spouse and children who are financially dependent on you, and in your absence they might not be able to meet their living expenses, then you should get life insurance.

A standard term plan is the best option for you. This is pure life cover and no part of your premium is invested. Premiums of term plans are the lowest in the industry, with the corresponding payout in case of death being the highest, compared to the premium. For example, a 40 year old male would most likely pay between Rs. 16,000 and Rs. 25,000 per annum, for Rs. 50 lakhs of life cover.

As an NRI:

Consider the case of an NRI who is studying / working abroad. You can opt for a standard term plan to financially protect your dependents. This can be taken from any of the current insurance companies available in India. However, the definition of an NRI is specified by the insurance companies. For the purposes of this article, a key insurance provider was assessed, and the rules are broadly as follows:

• An NRI is an Indian citizen who is temporarily residing in the country of his/her current residence, and holds a valid Indian passport.
• Most insurance companies require that you should not be a green card holder. If you are a citizen of a foreign nation, or are planning to acquire citizenship, you would not be entitled to take life insurance from most Indian insurance companies.
• If you are already living abroad and wish to take life insurance from there itself, you can opt for the local branches of your chosen insurance company through mail order. The company will issue a policy to you and complete the formalities in your country of current residence itself. However do check this with your chosen insurance company. Most companies will offer you term insurance during your visit to India.
• Note that if you choose to take the insurance while living abroad, without visiting India, then your insurance provider might limit the maximum sum assured you can opt for.
• Premiums are typically required to be paid in INR, however this need not be the case with every insurer.

• Can the policy be issued in foreign currency (if you wish for it to be in the currency of your current country of residence)?
• How will claims be paid (in which currency, and into which account i.e. NRE / NRO)?
  Do note that different insurance providers have different allowances in terms of the above mentioned points, it is necessary to speak to the insurance provider and ask the relevant questions.