How NRIs Can Choose the Right Term Insurance Plan for Their Families in India

Living away from India presents a whole world of opportunities. You work hard in the foreign land to provide the best for your family back home. But how hard can you work if those you love are safe and sound?

Securing a term insurance plan is one of the best things you can do for your family. Insurance companies in India offer special plans for non-resident Indians (NRIs). Finding the best term insurance for NRIs is now a cakewalk.

This informative guide will enlighten you on all the basic steps, in a very simplified manner, that you need to take to get the best term insurance plan for your family.

What Is a Term Insurance Plan?

A term insurance plan is a very straightforward life insurance policy that lets you pay a certain premium to the insurer for a specific duration. In case of any unfortunate incident, the insurance company pays a pre-decided sum of money to your nominees. Your parents, spouse, and children can easily manage their livelihood without having to stress over financial obligations like education, mortgages, etc., with a term insurance plan.

4 Reasons Why NRIs Should Buy a Term Insurance Plan in India

Purchasing term life insurance in India makes complete sense for NRIs. Here are 4 reasons why you should think about buying a term insurance policy in India:

Cheaper Premiums

The premiums for term life insurance plans in India are generally much cheaper as compared to those in the foreign country.

Currency Value Benefit

When you pay the premium in Indian Rupees (INR), you get the upper hand as the value of INR is much higher than the foreign currency.

Easy Claim Settlement for Family in India

If your family stays in India, it will be much easier for them to receive the death claim proceeds directly in their bank accounts.

Claim Settlement Is Tax-Free in India

Under Section 10(10D) of the Income Tax Act 1956, the death claim received from an insurance company is tax-free. Also, you can claim deductions on the premium amount under Section 80C of the Income Tax Act 1956.

5 Simple Steps to Choose the Best Term Life Insurance for NRI

Here are 5 quick and easy steps to choose the best term life insurance for NRI:

Calculate the Sum Assured

The sum assured means the amount that your nominees will receive on your demise. As a thumb rule, you must choose a sum-assured amount that is 10–15 times your annual income. It is essential that you calculate your financial obligations thoroughly and select a sum assured that can suffice with ease. You should also consider your family’s current and future financial needs. For example, if you have taken a personal loan or education loan, it is important that the sum assured is enough to pay off all your debts.

Select the Suitable Policy Tenure

It is important that you choose a suitable policy tenure. Ideally, you must buy a term plan that lasts as long as your income-generating period. For example, if you are 30 years old and expect to retire at 60, you must buy a 30-year term plan.

Look for a High Claim Settlement Ratio (CSR)

Claim Settlement Ratio (CSR) refers to the percentage of claims settled by an insurance company out of all the claims received in a given fiscal year. You must look for a high CSR (more than 95%) while choosing the best term insurance for NRI.

Add Riders, If Required

Riders are additional benefits that can be added to your term life insurance plan for an extra premium. Critical illness and accidental death are some of the best riders that you can add to your term insurance plan. These riders provide an additional cover of a particular sum assured in case of death due to an accident or diagnosis of a critical illness.

Choose Flexible Modes of Premium Payments

As an NRI, you can pay your premiums through Non-Resident External (NRE) accounts, Non-Resident Ordinary (NRO) accounts, and foreign cards. However, if you wish to repatriate the claim proceeds, it is better to make premium payments from NRE accounts.

Documents Required for NRIs

Applying for a term insurance plan from abroad is simple and fully digital today. You do not even need to travel to India. Keep these basic documents ready:

How to Apply Online in 4 Quick Steps

• Compare Plans Online: Check out reliable insurance sites to compare quotes, benefits, and claim ratios
• Fill Out the Form: Give basic details such as age, home location, habits, and income
• Upload Documents: Attach soft copies of your passport, income proof, and bank statements
• Complete the Medical Test: Most insurance companies offer an online video medical test or ask you to visit an accredited clinic abroad.

Conclusion

Distance is not a barrier to making the lives of those we love better. Getting the best term insurance for an NRI is one of the most thoughtful acts one can do in life. This is a simple and affordable act that makes it possible for you to make long-term financial provisions for your loved ones back home. The right term insurance for Indians living overseas will be of great comfort to your family in your absence. Compare the best term insurance options and get your family the best life they deserve.