Life insurance is considered an effective financial tool to protect your family's financial future. The term insurance solutions, offer a huge sum assured at an extremely affordable rate. Therefore, many of you purchase it to safeguard your family's financial interests even in your absence.
However, you might plan to move to a foreign destination, such as Canada, due to changing life scenarios. In such cases, does a term plan in India get eligible for the benefits? Let us try to understand it here.
Understanding Term Insurance Plans In India
A term insurance plan provides financial protection to your family's future in the event of your unexpected death during the policy term. Your loved ones can utilise the death benefit for their daily life requirements and other future money goals.
And, for any reason, if you move abroad and meet with an unexpected death there, your term life insurance policy will still be active in India. Therefore, term insurance and its benefits are applicable for Non-Indian Residents(NRIs) and Persons Of Indian Origin(PIO).
Are Citizens of Canada Eligible for Term Insurance In India?
Yes, NRIs and PIOs who reside in Canada irrespective of their citizenship status in India can buy term insurance in India and become eligible for the benefits in case of their unexpected death in a different country. However, before we know the applicability, let us understand the NRIs and PIOs.
- Non-Resident Indians are citizens of India who have lived abroad for more than 182 days. However, they can trace their birth to the Republic of India.
- Persons of Indian Origin are either born in India or have Indian descendants such as their spouse, parents, grandparents.
Therefore, term insurance plans and their benefits for NRIs are applicable based on certain guidelines.
- The person purchasing the term insurance plan should have an Indian origin.
- It is important to inform your insurer about your movement to a foreign destination before you shift and travel.
Let us consider a simple example. Mr Prem worked in an IT firm in India. He was responsible for taking care of his spouse, two children, and dependent parents. Therefore, purchasing a term plan with an adequate sum assured became an ultimate necessity. So, he purchased a term plan at an affordable rate when he started his career.
Later, he decided to look for better opportunities outside India and prepared for it. As a result, he got placed in an MNC company in Canada and shifted to that location. But unfortunately, he lost his life due to an accident in Canada after a few months. However, as he had an active life insurance policy, the insurer paid his family the lump sum death benefit to reduce the financial burden to a considerable extent.
Pointers to Consider
If you are planning to move to Canada, keep the following pointers in mind while seeking term insurance in India:
- You can make the premium payment for the term insurance if you are an NRI through a Non-resident ordinary(NRO) bank account, FCNR/NRE bank account or Settlement payment in foreign currency. If your insurer has provided the policy in foreign currency, you can make the premium payments through the FCNR/NRE account. And, if it is issued in Indian rupees, then you can pay through the NRO account.
- The premium might get changed based on the living conditions in Canada. For example, if unstable government conditions prevail that increase the risk of living, the premium rate is subject to an increase.
- The death benefit will be provided to the nominees irrespective of your death in any part of the world. The nominee has to intimate the death to your insurer and provide the necessary documents to make the death claim.
- The death claim amount is transferable to Canada only if the premium paid is equal to the premium paid in the Canadian dollar. It is not transferable if the premium is paid entirely in Indian Rupees. However, if you have purchased the policy before becoming an NRI, the extent of proceeds based on the premium paid in the Canadian dollar will be transferable. Therefore, check the policy documents for these details before investing.
- Proposal Form
- Income proof
- Attested copy of passport
- Medical reports
- Enrolment contract
- Additional documents required by specific insurers
Claim process documents
- Certificate of employer
- Embalming certificate if the body is preserved for certain reasons
- Death certificate verified by Indian Embassy
Consider the taxation guidelines in Canada and make the necessary proceeds promptly to avoid discrepancies later.
How Can NRIs Purchase Term Insurance in India?
There are two ways NRIs can purchase term insurance in India.
- Purchase when you plan for a trip to India.
- Purchase from the foreign country while residing there via online services. Online term insurance in India has recently developed, making the process more convenient and cost-effective.
At Tata AIA Life Insurance, we have several online features making it extremely user friendly for all policy seekers. You can read, understand and compare several policy features online. Therefore, you can purchase Tata AIA Life Insurance term plan online by providing the required details, choosing the necessary features and tracking your account anytime! Our customer service team can help you handle the account and the process by promptly answering your queries regarding online term plans.
Term insurance policies and their benefits are available for NRIs and PIOs. Therefore, if you are a person of Indian origin living in Canada, you can purchase term insurance to secure your family's financial future. As a result, your loved ones can receive the benefits of your unexpected death irrespective of the location. You can purchase the term plan in India or from Canada through online services. However, it is important to understand the policy documents before investing to receive maximum benefits when your family is in extreme need.