The share of NRI purchases of term plans of sum assured Rs 3 crore and above has increased by 35% in the last one year because of the removal of GST on life insurance premium and geopolitical uncertainty, especially in West Asia, data from Policybazaar show. Rider adoption among NRIs has increased 15%, driven primarily by accidental death benefit and waiver of premium.
Many NRIs consider Indian term plans because their financial lives are not entirely overseas. They still support parents, have a home loan or other liabilities in India, and want a rupee-denominated protection pool for dependants here. Digital journeys make comparison and medicals abroad easier, while an Indian policy lets the nominee here deal with a local insurer.
Abhishek Bansal, CEO, Insurance Business, InsuranceDekho, says, that is particularly useful where liabilities are in rupees. “If a family’s expenses are largely overseas, an Indian plan may complement rather than replace local cover. The usual purchase is a pure protection plan with a long term and an adequate lump sum,” he says.
Comprehensive protection
For life cover, a broad rule of thumb of around 15-20 times annual income can provide a starting point for assessing the level of protection required. However, the final cover depends on factors such as outstanding loans, dependents, children’s education and long-term financial commitments.
The policy duration of term plans bought by NRIs is aligned with the period for which financial dependents and liabilities are expected to remain. “Many individuals opt for coverage extending into their working years or until around 70–75 years of age, although the appropriate tenure can vary based on their income horizon, family responsibilities and retirement plans,” says Varun Agarwal, head, Term Insurance, Policybazaar.
For riders, NRIs consider options such as critical illness cover, accidental death cover and a waiver of premium on disability or specified illness. A waiver of premium helps keep the base cover active if a disabling event affects the policyholder’s ability to pay. “NRIs should also check whether each rider applies in their country of residence and whether its definitions match their needs,” says Bansal.
Online onboarding
Most insurers allow NRIs to apply remotely through video KYC and telemedical or local medical checks. They need to submit documents such as identity, address abroad, income proof and medical history. “Premiums can be paid through NRE or NRO accounts and FEMA rules govern how that money moves,” says Sarita Joshi, head, Health and Life Insurance, Probus.
Before buying a term plan from India. NRIs must compare exclusions, premium payment options, currency exposure and tax treatment in India and the country of residence.
