Many NRIs tend to have a very strong root in India, making it possible for them to come back after residing outside for a few years. If you are someone like that, chances are that you need to keep certain things in mind before finalizing the documents for the life insurance you are taking in India.
With so many types of NRIs approaching such companies, most of the insurance companies are now coming up with customizable plans to help meet the requirements.
Here are some of the important tips to keep in mind before getting insurance in India.
Go through the eligibility criteria
It is a common misconception that NRIs aren’t allowed to get life insurance in India. On the contrary, NRIs and PIOs are allowed to get their needed life insurance, following the fulfillment of the necessary eligibility criteria.
Some of the important eligibility criteria include:
- The individual should have a valid Indian passport or must have had one at a certain point in time
- The individual’s parents or grandparents were the citizen of India as per the laws and administration
- The individuals is the legally married partner of an Indian citizen as mentioned under the clause 1 and 2
Make sure that you are eligible under at least one of these criteria for you to get the life insurance accordingly.
Choose the company
Once you know that you are eligible for the life insurance, the next thing that you need to do is focus on choosing the company you want the insurance to be from. On a basic level, there are around 23 different types of reliable insurers that you can get your life insurance from. While choosing an insurer, there are a few factors that you need to consider.
Some of the factors include looking into the pedigree of the management, the claim settlement ratio, the reliability and the customer reviews of the company etc.
For the most part, there aren’t specific policies targeted towards the NRIs but there have been few adjustments and changes made to further make the policies good for the people. These companies will help you right from the get go and even get the medical tests and the associated factors sorted out for good.
Some of the best life insurance companies include:
- SBI Life Insurance
- Max Life Insurance
- Life Insurance Corporation of India (LIC)
- ICICI Prudential Life Insurance
- Kotak Life Insurance
Enlighten yourself about the taxation
With the companies sorted, the next thing that you need to know about is the process involved through with the taxation. Before you buy the policy, it is best that you enquire about the tax laws in India as well as the place that you are currently staying in.
It is important that you check through the tax legalities through all the stages of the policy – the investment, accumulation as well as the maturity. The current tax laws in India exempt you from paying excess taxes but it is important that you clarify that the same is the case with the country you are in as well.
If everything seems confusion when it comes to the tax laws and legalities, it is best that you consider talking to someone professional to get these queries clarified.
Mode of Payment
The next thing to consider in the prospect of the life insurance for NRIs is to understand about the mode of payment. It is always best to check them out beforehand so as to ensure that you don’t face any kind of issues with the premium payment later.
There are primarily two modes – paying in the foreign currency denominated policies and the other ones being paying in the Indian currency. For the prior, you use the NRE/FCNR accounts while for the latter, you use the NRO accounts.
Medical Examination
The last but not the least when it comes to the life insurance for the NRIs is to know about the medical examination procedure.
Since you are residing outside India, there are predominantly two ways that you can get it done. One way is by coming down to India and letting your medical insurer bear the costs of the tests. The other way is to get the needed tests done and then send in the reports to the life insurance company that you are getting the policy from.
When it comes to getting the life insurance for NRIs, these are some of the important points that one needs to keep in mind. Ensure that you don’t necessarily struggle with the process because otherwise you are going to face an issue altogether.
