For a large section of the Indian population living abroad, the concept of financial protection starts and ends with family. It does not matter if you have moved to a different country to work, study or for permanent relocation; your financial obligations do not simply stop at the border. It is quite important to consider life insurance plans for NRIs.
While insurance may seem straightforward, it works differently when you’re a non-resident. From eligibility rules and tax benefits to customisation options and claim procedures, there’s a lot to consider before buying one. But it’s not complicated once you break it down.
What is an NRI Life Insurance Plan?
At its most fundamental level, the life insurance plan for NRIs operates similarly to that of a resident in India. What it offers is designed specifically for individuals living outside of the country and earning their incomes elsewhere.
Theinsurance plans for NRI customers are issued by Indian life insurers but must comply with both IRDAI (Insurance Regulatory and Development Authority of India) guidelines and FEMA (Foreign Exchange Management Act) rules. As long as these are followed, NRIs can easily buy term plans from India.
Even with international residency, your Indian citizenship or status as an Overseas Citizen of India (OCI) makes you eligible. In fact, many insurers have digitised the process, making online applications, document submissions, and premium payments not just possible but efficient.
Why NRIs Are Increasingly Opting for Indian Ter
m Plans
The demand for life insurance plans among NRIs has grown steadily. There’s more familiarity with Indian insurers, plans are often more affordable compared to international options, and there are potential tax savings if you have income in India.
For example, an NRI earning in the UAE might prefer securing a term cover worth ₹1 crore through an Indian insurer because even with currency conversion, the premium cost tends to be lower. Combine that with tax benefits under Section 80C and 80D (under the old tax regime), and it becomes a financially sound decision.
Eligibility Criteria for Buying Term Insurance in India as an NRI
It’s not just NRIs who can apply. Here’s a quick look at the categories of people eligible to purchase insurance plans for NRIs in India:
| Applicant Type | Who They Are |
| Non-Resident Indian (NRI) | Indian passport holders residing abroad for employment, studies, or business. |
| Overseas Citizens of India (OCI) | Foreign nationals of Indian origin (excluding citizens of Pakistan and Bangladesh). |
| Person of Indian Origin (PIO) | Foreign nationals whose parents or grandparents were Indian citizens. |
| Foreign Nationals | Citizens of other countries temporarily residing in India. |
*These plans may change depending on the foreign policies.
Eligibility is often backed by standard documents like passport copies, income proofs, and overseas residence details. Most insurers now accept these online, with e-verification simplifying the process further.
Important Features of NRI Term Insurance Plans
Although traditional plans do not have much flexibility, the term insurance plans for NRIs provide some features that are worth highlighting. Let’s discuss the primary features:
- Simple to purchase: Whether you are in India or abroad, you can apply, submit your documents, and pay the premiums through the digital platform.
- GST Saving: Term insurance plans have a flat 18% GST saving on term insurance, which can lead to huge savings.
- Choice of sum assured: NRIs typically go for higher life covers due to the cost of living overseas. Cover amounts of ₹1 crore and above are common and affordable.
- Policy tenure flexibility: A 25-year-old can choose to cover up to 85 years, while a 40-year-old might settle for a 40-year term. It’s flexible.
- Claim payout options: Beneficiaries can receive the payout as a lump sum, monthly income, or a combination, based on what better suits them.
- Return of Premium (ROP): Some term plans offer the option to return the premiums paid if the policyholder survives the policy term.
Comprehending the Tax Benefits
NRIs with taxable income in India can receive deductions under Section 80C* for Life Insurance premiums. If you have selected a health rider such as critical illness cover, the benefits of Section 80D* may also apply.
However, this correlates only to income earned in India. For example, if a person works in Singapore and also has rental income from a flat in Mumbai, they can offset their term insurance premium payments with this income.
*This section is available in the old tax regime.
Conclusion
When you stay away from home, you want to provide the best life to your family living in India. In all of this, financial protection is an undeniable factor. But here’s the thing: a dedicated life insurance plan doesn’t just offer a payout—it provides peace of mind for you and your family.
If your loved ones are in India, getting a policy issued here makes sense. It reduces claims, cuts down on legal hassle, and ensures ease of obtaining assistance when you most need it. And when you add up the low premiums, ease of digital submission, and tax benefits, it becomes less of a formality and more of a sensible decision. Many insurance companies, like Axis Max Life Insurance, offer term plans specifically designed for NRIs. If you are making plans for the future, this is one thing that is definitely worth taking into account.
