A Term Plan for NRI is conceptualised for Non-Resident Indians, Overseas Citizens of India or Persons of India Origin cardholders, and their families to fulfil the financial requirements. Irrespective of the place of residence, the term plan provides financial security along with the death benefit in the absence of the policyholder.
In other plans, the term plan for NRI works in alignment with other term plans available in India. In this plan, the policyholder is required to pay the premium amount to get themselves covered. In any unfortunate event, the beneficiary will receive the death benefit to repay their debts or liabilities, if any. The amount of coverage received can be used to make payments in order to maintain the standard of living.
Points to be considered while buying a Term Plan for NRI in India
Provided below are things to be considered while buying a term policy for NRI in India:
- An NRI can purchase a pure-term plan, which offers extensive coverage, providing death benefits but no maturity benefits to secure their family.
- NRI individuals can also choose to buy a term plan with a return of premiums. In TROPs, the death benefits are provided on their death, but if they survive, they will also receive all the premiums paid as maturity benefits.
- However, an NRI does not need to be present in India when the policy is bought; he needs to get his medical tests done and submit the report. It can be done from their country of origin or via tele or video medical facility provided by the insurance provider.
- A valid copy of the Pan card must be provided in order to claim a deduction of tax u/s 80C of the Income Tax Act. This can only happen when they are in India.
- Before proceeding with buying, it is mandatory that an Indian Diplomat and a notary should verify.
Eligibility Criteria
One can purchase a term plan in case of NRI having a minimum age of 18 years. Provided below is a list of individuals who can buy a term plan in India:
- Non-Resident Indians (NRIs)
They are a citizen of India who is temporarily living in India having a valid Indian passport.
- Overseas Citizen of India (OCI) or Person of India Origin (PIO)
Overseas Citizen of India or Person of India Origin are nationals living abroad except for Pakistan and Bangladesh.They should be either spouse, parents or grandparents of Indian National or previously had an Indian passport.
- Foreign Nationals
People residing in India but are foreign nationals.
Benefits of the NRI Term Plan in 2024
Following are the top benefits of buying NRI term plan:
- Financial Protection
Term insurance provides financial security to the family members of the policyholder after the unfortunate demise of the policyholder.
- Flexibility in Payment Modes
You can opt for monthly insurance premium payment, quarterly payments, semi-annually or annually premium payments. This helps you make insurance premium payment as per your convenience and budget.
You can also use term insurance calculator to evaluate the premium that you will be required to pay.
- Long Term Coverage
It offers pure risk coverage for long-tenure coverage by providing comprehensive and flexible coverage.
- Choose the Best Pay Out Option
Choose any payout option from lumpsum, regular or a combination of both. You can opt for a plan which suits your requirements.
- Death Benefit
Save tax on the amount of death benefit received by the nominees in the event of unfortunate death of the policyholder u/s 10(10D) of Income Tax Act, 1961.
- Limited Pay Benefit
With a Limited pay benefit, you can make recurring payments for a limited period of time. So, your term insurance will be enabled for the entire policy tenure and pay premium for a shorter tenure.
Documents Required to Buy a Term Plan for NRI
Provided are the documents required to be submitted to buy a term plan for NRI:
- Proof of Income
- PAN or TIN Number
- Form 60 or Declaration
- NRI Questionnaire
- Copy of Visa
- KYC Documents
- Copy of Passport including details of entry and exit
How to Purchase a NRI Term Insurance in India?
Follow the steps mentioned below to purchase NRI Term Insurance in India without any hassles:
Step 1: Visit the insurance provider’sofficial website. Check for Term insurance plan for NRI.
Step 2: Provide necessary details like name, birth date, contact details, country of residence, and gender. Click on the “View Plans” button.
Step 3: Provide the educational details, occupation type, annual income, and choose if you smoke or don’t.
Step 4: Compare all the term insurance plans available and opt for the one which suits your requirements.
Step 5: Proceed to make payment.
How to Claim an NRI Term Insurance in India?
Mentioned are the steps to claim an NRI Term Insurance in India:
Step 1:For instance, inform the insurer company about the death of the policyholder.
Step 2: Complete all the formalities, such as submitting the documents. This includes claim forms, policy documents, medical and death certificates, post-mortem reports, etc.
Step 3: The investigation will be performed by the insurance company, which may take up to 3 months.
Step 4: The insurance company may ask for any additional documents for clarification purposes.
Step 5: The insurance company, after approval, will disburse the claim amount.
Conclusion
Term plan is a vital insurance product which helps you manage your finances better and provides financial security in case of a policyholder’s untimely demise. Term plan for NRIs help provide the financial security even though you reside in any other country away from your home and family.
