Sandeep, a 36-year-old software engineer, had been staying in the UK for the last 7 years. An unfortunate accident cost Sandeep his life and left his retired parents emotionally upset back in India. However, they were saved from the financial turmoil of the loss of their only son because of the online term policy Sandeep had bought. The term insurance coverage of Sandeep’s life insurance policy helped his parents to live respectfully even after he was gone.
If you are planning to move to a country outside India, you may wonder, ‘Is term insurance good’ and ‘will my term insurance cover still be valid?’ The good news is that a term insurance policy holds good even when you are abroad, subject to a few conditions.
Read further to know the details of an international term life insurance policy and its features.
Key Points for Term Insurance Coverage Outside India
Moving to another country does not affect the term life insurance coverage as long as you pay your premiums on time. Here are some details you need to keep in mind about term insurance for NRIs and people moving abroad.
You must be a citizen of India at the time of buying a term insurance plan.
You must not have applied or are not planning to apply for foreign citizenship soon at the time of purchasing the term insurance plan.
An NRI or a PIO can buy a term insurance plan in India online or offline. You can buy an offline term insurance plan when you visit India by completing the application procedure and underwriting formalities. Alternatively, you can buy an online term policy. The online term insurance policy is subject to verification from an Indian Diplomat, an Official of the relevant Indian Embassy, or a notary.
The tenure of term insurance for NRIs usually ranges between 6 months to 25 years.
Certain countries deemed as high-risk countries are not covered by some insurance companies in India. Therefore, it is essential to timely inform your insurance provider about your move to another country.
Features of a Term Insurance Policy in India for NRIs or Indians Moving Abroad
An NRI or a Non-resident Indian is a person of Indian origin who has been living in a country other than India for business, employment, etc. Similarly, an Indian citizen who lived in India for not longer than 181 days during the previous financial year is also considered an NRI.
Some essential features of a term insurance plan for NRIs, PIOs, or people moving abroad for work or education are as follows:
Policyholder’s age: An individual moving abroad has to be between the age of 18 and 55 to 60 to buy a term insurance plan in India. The exact age bracket varies for insurers and depends on the health condition of the policyholder and the terms of the policy.
Sum assured: The coverage provided under such a term insurance plan can range between ₹2 lakhs to ₹1 crore. Factors such as the NRI’s job profile, income, country of residence, and health conditions affect the sum assured. In the event of the NRI policyholder’s demise, this coverage amount is provided to his nominee in the NRE account.
Policy premium: The premium paid by an NRI and a resident Indian is the same for the same sum assured, with other conditions remaining the same. A non-resident Indian can pay the term insurance policy premiums through an NRO/NRE bank account or remittance in foreign currency.
Policy renewal: Some insurance providers offer the facility of policy renewal at maturity to NRI term insurance policyholders. To renew a term insurance policy, you must undergo a medical examination, as the insurer prescribes. Additionally, ensure that you do not miss paying your policy premiums during the policy duration to establish a good track record with the insurer. A good record helps in easy policy renewal and may even bring you a lower premium for the renewed policy.
Documentation for a Term Insurance Policy for NRIs
An NRI has to submit the following documents to the insurance company to buy a term insurance policy in India:
Policy proposal form
Attested copy of passport
The first premium amount submitted as the application fee
If the NRI wants to buy a term policy through the Mail Order Business mode, he has to submit the following additional documents:
Copy of income tax* return statements
Copy of employment contract having details of pay compensation
Certificate from a Chartered Accountant
Personal finance questionnaire
In case of the policyholder’s demise outside India, his nominee or beneficiary has to submit the following documents to the insurance provider:
Duly filled and signed claim intimation form
Original policy document
Employer certificate (along with leave and contact information)
Embalming certificate if the body of the deceased has been embalmed
Copy of death certificate (verified by the Indian Embassy in the concerned country)
Translation of documents (not in English originally)
Term life insurance plans for NRIs from Tata AIA insurance are designed to financially support the policyholder’s family in the event of his untimely death. Additionally, our comprehensive plans, such as savings and retirement plans for NRIs, multiply the policyholder’s returns by offering savings and investment benefits.
Choose an NRI insurance plan based on your coverage requirement and budget.
NRIs and people moving outside India can buy term insurance in India to provide financial coverage to their loved ones in their absence. If you are planning to move out of India for work or education, it is essential you update your insurance provider about this movement and provide the necessary documents.