For Non-Resident Indians (NRIs), living abroad does not diminish the financial responsibilities they have towards their families and assets back home. An NRI insurance policy serves as a vital financial safety net, providing peace of mind across thousands of miles. This guide defines what an insurance policy in india for NRI involves, explains why it is a wise decision for securing your loved ones' future, details who is eligible to buy one, and clarifies how it protects your interests.
Top 10 Insurance Companies Offering NRI Plans
Several of India's most reputable insurance companies have streamlined processes and dedicated plans for Non-Resident Indians. Here are some of the leading providers in the market.
| Company Name | Claim Settlement Ratio (2023-24) | Key Feature for NRIs |
|---|---|---|
| LIC of India | 98.5% | Extensive network and a high trust factor. |
| HDFC Life | 99.3% | Wide range of products and digital services. |
| ICICI Prudential Life | 99.1% | Innovative plans and strong customer support. |
| Max Life Insurance | 99.5% | High claim settlement ratio and flexible options. |
| SBI Life Insurance | 97.0% | An extensive network and a high trust factor. |
| Bajaj Allianz Life | 99.2% | Comprehensive plans with various rider options. |
| Tata AIA Life | 99.0% | Strong brand reputation and customer-centric approach. |
| Kotak Mahindra Life | 98.8% | Tailored protection and long-term savings plans. |
| Birla Sun Life Insurance | 98.1% | Backed by India's largest bank, offering a wide reach. |
| PNB MetLife | 97.3% | Focus on simple and easy-to-understand policies. |
Note: Claim Settlement Ratios are subject to change and should be verified from the latest IRDAI annual report.
Types of Insurance Policies Available for NRIs
NRIs have access to a wide variety of insurance products in India, each designed to address specific risks and offer tailored protection. Here are the most important types.
- Term Life Insurance: This is a pure protection plan that provides a large sum of money to your family in case of your unfortunate demise during the policy term.
- Health Insurance: This covers medical expenses incurred during visits to India. Some plans also offer coverage for parents residing in India.
- Personal Accident Insurance: This policy provides financial compensation in the event of death or disability resulting from an accident.
- Retirement & Pension Plans: These are long-term investment plans that help you build a corpus for your post-retirement life, providing a regular income stream. You can learn more about these in our guide to Retirement Plans for NRIs.
- ULIPs (Unit Linked Insurance Plans): These plans offer a combination of insurance coverage and investment in market-linked funds, providing both protection and wealth creation opportunities.
What are the Eligibility Criteria for NRI Insurance Policies in India?
To purchase an insurance policy in India from abroad, NRIs need to meet a few basic eligibility conditions set by the insurers.
- You must be an Indian citizen holding a valid Indian passport, currently residing in another country.
- You must have a legitimate reason for your stay abroad, supported by a valid visa (such as a work permit, residence visa, or student visa).
- You need to have one of the Types of NRI Accounts (NRE/NRO) for paying premiums in Indian Rupees.
- You must meet the minimum and maximum age criteria specified by the insurance company for the chosen plan.
- You may be required to undergo a medical examination, either in your country of residence or during a visit to India.
What are the Documents Required to Buy Insurance in India as an NRI?
The documentation process for NRIs is straightforward and requires a few additional papers to verify your non-resident status.
- Completed Proposal Form: The official application form from the insurance company, duly filled and signed.
- Passport Copy: Clear copies of the first and last pages, along with pages showing your visa details.
- Photographs: Recent passport-sized colour photographs.
- Proof of Address: A copy of a utility bill, driving license, or bank statement from your country of residence and the Address proof in India.
- Proof of Income: Salary slips, bank statements, or income tax returns to establish your income level. You’d also need employment proof from your country of residence.
- NRI PAN Card: An NRI PAN Card is mandatory for all financial transactions in India, including buying insurance.
Tax Benefits of NRI Insurance Policies
An NRI insurance policy not only provides security but also comes with significant tax advantages under the Indian Income Tax Act. This makes it a key component of Financial Planning for Non-Resident Indians.
- Deduction on Premiums (Section 80C): The premiums you pay for a life insurance policy or certain pension plans are eligible for a tax deduction up to ₹1.5 lakh per year.
- Tax-Free Maturity Proceeds (Section 10(10D)): In most cases, the maturity amount or the death benefit received from a life insurance policy is completely tax-free in India.
- Deduction for Health Insurance (Section 80D): Premiums paid for a health insurance policy for yourself, your spouse, children, or parents in India can be claimed as a deduction.
- Lower Tax on Payouts with DTAA: In cases where the maturity proceeds are taxable, you can take advantage of a DTAA Income Tax agreement between India and your country of residence to avoid double taxation.
How to Claim Policies for NRIs?
The claim process is designed to be smooth for the nominee, who is often residing in India. Here are the typical steps to follow.
- Step 1: Claim Intimation: The nominee must inform the insurance company about the claim event (e.g., death of the policyholder) as soon as possible.
- Step 2: Submission of Claim Form: The nominee needs to fill out the required claim form provided by the insurer.
- Step 3: Document Submission: The nominee must submit necessary documents, which typically include the original policy document, the death certificate issued by the relevant authorities, and their own KYC documents.
- Step 4: Verification by Insurer: The insurance company will verify the submitted documents and the legitimacy of the claim.
- Step 5: Claim Settlement: Once the verification is complete, the claim amount is transferred to the nominee's bank account.
How to Choose the Right NRI Insurance Plan?
Selecting the right insurance plan from numerous options requires careful thought. Here are some key pointers to help you make an informed decision.
- Assess Your Needs: Calculate the financial support your family would need in your absence, considering liabilities like home loans and future goals like children's education.
- Compare Claim Settlement Ratio: Always choose an insurer with a consistently high claim settlement ratio, as this indicates their reliability in paying out claims.
- Check Policy Features: Look for features beneficial for NRIs, such as the option to pay premiums from abroad or tele-medical check-up facilities.
- Understand Premium Payments: Confirm the acceptable modes of payment. Most insurers accept payments through NRE/NRO accounts. Some may also allow payments via international credit cards.
- Read the Fine Print: Carefully read the policy document to understand all the inclusions, exclusions, and terms and conditions before making a final decision.
How NoBroker Can Help with NRI Services?
Navigating the complexities of an NRI insurance policy, understanding the fine print, or assisting your family with the claim process can be challenging from overseas. NoBroker’s NRI legal assistance services can offer the professional support you need. Our experts can help you and your family understand the legal documentation and procedural requirements, ensuring your financial planning is secure and your loved ones are protected.
