Mahavir Chopra
You may be well settled in a foreign country but your love and concern for your family members’ future just keeps growing over the years. Well, life insurance is here to put your mind at ease. Let’s see how!
If you are an NRI and are looking for an affordable protection plan from India, there are now some interesting plans offered by insurers. You can buy term insurance plans at premiums that are one of the cheapest in the world, at the same time it gives you the comfort of buying through a known brand back in your homeland.
While this could be interesting, you may have a lot of questions sitting in a foreign country about the process of enrolling into such plans. We have tried to answer them below.
Can NRIs buy a life insurance plan?
Yes; Non-Resident Indians (NRIs), People of Indian Origin (PIOs) can buy a life insurance plan in India. Foreign Exchange Management Act (FEMA) allows NRIs to buy any plan that meets their requirements of protecting themselves and their family whether he is currently residing in India or not.
Is being present in India compulsory for buying a life insurance plan?
No; being present in India is not at all compulsory while buying a life insurance plan. It may differ from company to company. The best way to go about buying a life insurance for an NRI is by going the online route. This way you can compare all available options to find the best plan and buy it instantly from the comfort of your home or office from your current country of residence. Though not required but being present in India while buying a life insurance plan is highly beneficial. If you are present in India at the time of buying the policy, the insurer can conduct the required medical check-ups. The cost of these medical check-ups is borne by the insurer. If you buy a life insurance policy from the country of your current residence, you may be asked to undergo a medical check-up there and then send across the reports to the insurer in India. Thus, you would be incurring an additional cost from your own pocket. Insurers have started offering a high sum assured on their pure term plans like Max Life offers a cover of up to Rs. 2.5 crores and HDFC Life offers Rs. 3 crore without any medicals. Insurers are also offering telephonic underwriting services to help NRIs buy Life Insurance Plans.
In the meantime, some insurers have started setting up offices in major foreign countries which help in documentation, medical tests and other formalities involved in buying a life insurance plan, global presence will definitely take time.
Will my country of residence affect my application?
Yes, life insurance companies pay close attention to the information regarding the country you are currently residing in. A country that is more prone to civil or military issues, has an unstable government and constant violent attacks take place on its citizens, such countries are labelled as High-risk Countries. In the same way, a country that is peaceful, has a stable government, proper law and order situation, such countries are labelled as Low-risk Countries. Hence, if your country of residence is a High-risk country, your application for life insurance will be rejected or a higher premium may be charged and if it’s a low-risk country it will be easily accepted.
How can I pay premiums for it?
The premium for your life insurance policy can be paid by remittance in foreign currency or through an NRO bank account or NRE/FCNR bank account. Here it is important to check the currency in which the policy is issued to you. If the life insurance policy is issued to you in a foreign currency, the premiums will have to be paid in the denominated foreign currency from an NRE/FCNR account. If the policy is issued in Indian Rupees, the premiums will be paid through an NRO account.
What about the pay-out made by a life insurance company?
Just as premiums, benefits paid from the life insurance companies will also be in the currency denoted in the policy document i.e. either in rupee or foreign currency. For making a claim on your life insurance policy, you/nominee would require to submit the documents as listed in the policy document. This list of documents required will vary from insurer to insurer.
Most commonly in case of a death benefit, the insurer will require the original policy document, identity proof of the nominee, death certificate of the insured person and so on. An important point to remember here is that if death occurs in a foreign country the insurer will ask for a death certificate which is attested by the Indian embassy or High Commission in that country. If an NRI dies in India, an attestation is not required in such cases.
The Crux
Life Insurance is the best way one can manage the risk of protecting their family members in their absence. Even though you are an NRI or a PIO, you must buy a life insurance plan at the earliest possible to secure your loved ones financially. Loss of the breadwinner can be a major setback for the remaining of the family members and life insurance can help in securing a decent lifestyle.
(The author is Director, Health, Life & Strategic Initiatives at Coverfox)
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