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Things NRIs in India Should Know About Term Insurance

31/10/2022 |

Term insurance is the simplest method to secure your family’s financial stability. As you progress through your career and family life, your financial commitments are bound to increase. Term life insurance is a cushion to support your family to strive for their dreams without worrying about the financial implications if you are not around. Life cover also helps in settling debt obligations. In India, both domestic and non-resident individuals can purchase term insurance.
 

Who is a Non-Resident Indian (NRI)?
 

Many Indians now have international careers with dynamic work arrangements. Some are placed overseas for a few years and come back. Many others work abroad for a few months and the remaining year in India. The definition of a “Non-resident Indian”is as an individual who has not resided in India for a certain number of months in a year. Additional conditions are also prescribed.
 

Can NRIs Purchase a Term Insurance Policy?
 

NRIs can purchase a term insurance plan according to their needs. Their physical presence in India at the time of purchase is not required. Even in policies that require a medical examination, it is enough if the applicant gets a certified report from a qualified medical professional in the country where they reside at the time of application.
 

Why is Term Life Insurance Important for NRIs?
 


In many families, the primary earning member is the NRI working abroad. The family meets their expenses and saves for future needs from the remittances received. They also assume loans such as for a home, a vehicle, children’s marriage, and so on.

 

However, if the NRI family member were to meet an unfortunate death due to any reason, the financial backlash would be very severe. Besides the emotional trauma, the burden of loans and an uncertain future could derail the family completely. To protect the family from such distressing circumstances, it is advisable to purchase life insurance cover in India for the non-resident primary earning member.
 

How Can NRIs Continue Their Insurance Coverage?
 

Many Indians wonder about insurance coverage when they become non-residents. The main query is what would happen to their term insurance policies. The answer is the policies will continue to run if the premiums are paid without any break.
 

For example, if you have purchased a Tata AIA term life insurance policy, you can pay the premium multiple online modes of payment, such as debit/credit card payment, net banking and so on. Even if you move abroad for work, the coverage will continue to be available.
 

How Can NRIs Pay the Premium on Their Term Insurance Policies?
 

It is always better to complete the term insurance transactions online. With the widespread availability of digital banking channels, NRIs can either pay through international credit/debit cards or use the funds in their NRO account to pay the premium on the due dates. The NRO account is designated in rupees. You can also pay the premium as a lump sum amount if allowed under the policy terms.
 

What Documents are Required to be Submitted by an NRI Purchasing a Term Plan in India?
 

Term insurance in India for NRIs can be easily purchased from the insurance company’s website or an insurance aggregator. The following documents should be submitted while purchasing the policy:
 

  • Attested copy of the passport
  • Proposal form duly filled up
  • Identity proof and address proof (local and overseas)
  • Copy of the income or earnings statement
  • Medical report certified by a qualified practitioner if a health check-up is required
     

Along with these documents, the first premium on the policy should be remitted to the company. Apart from these documents, the insurer might also need some specific documents.
 

What are the Salient Points of Term Plans Issued in India to NRIs?
 

Term insurance cover is essential for a person employed abroad to protect their family in the case of any unfortunate eventuality. Purchasing online term insurance for NRIs is a convenient method to complete the process when the individual is in the country on a holiday or family visit or before moving abroad. However, there are a few important points that NRIs should consider while purchasing the term insurance plan. These are discussed briefly here.
 

  • Country of residence: Insurance companies allow their policies to hold good in several countries but exclude a few countries where the coverage is not available. Therefore, the NRI must clarify whether the insurance company they have chosen offers coverage in the country of residence.

  • Obligation to disclose full medical history: The NRI applicant should fully disclose lifestyle habits, pre-existing illnesses and any other critical information regarding their health status. If any misrepresentation or suppression is discovered later, the policy may become invalidated.

  • Duty to notify transfer abroad: If the policyholder decides to move to a foreign country for a considerable time, they should notify the insurance company. Such disclosure is necessary to ensure that the coverage continues to be available in the other country or be modified suitably.
     
Conclusion
 

The need for term insurance has always been evident from the support it offers to the family of a deceased person. For non-resident Indians, the requirement is even more important considering they live and work in unfamiliar and distant locations. NRIs can keep their families back home safeguarded from financial distress with the right amount of coverage and riders#  based on specific requirements.
 

L&C/Advt/2022/Oct/2671

Your Life, Your Legacy: Life Insurance Inquiry for Indians Abroad

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Tata AIA Life Insurance

A joint venture between Tata Sons Pvt. Ltd. and AIA Group Ltd. (AIA),  Tata AIA Life Insurance  is one of the leading life insurance providers in India. We post everything you need to know about life insurance, tax savings and a variety of lateral topics such as savings and investments in this space. You can access and read a host of different blogs, articles and pages at the Tata AIA Life Insurance Knowledge Center or get in touch with us with any queries or questions!

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Disclaimers

  • Insurance cover is available under the product.
  • The products are underwritten by Tata AIA Life Insurance Company Ltd.
  • The plans are not a guaranteed issuance plan, and it will be subject to Company’s underwriting and acceptance.
  • For more details on risk factors, terms and conditions please read sales brochure carefully before concluding a sale.
  • This blog is for information and illustrative purposes only and does not purport to any financial or investment services and do not offer or form part of any offer or recommendation. The information is not and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.
  • Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company.
  • Every effort is made to ensure that all information contained in this blog is accurate at the date of publication, however, the Tata AIA Life shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.
  • #Rider is not mandatory and is available for a nominal extra cost. For more details on benefits, premiums, and exclusions under the Rider, please contact Tata AIA Life's Insurance Advisor/ branch.