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Can Nris Purchase Life Insurance In India?

By Author: bbindhusingh
Total Articles: 2

A Non-Resident Indian (NRI) can surely purchase life insurance in India. However, there are certain rules he/she will have to adhere to before becoming eligible to buy life insurance in India.

Eligibility- Any person who plans to purchase a life insurance plan must be eligible in order to purchase a policy. The same is applicable for an NRI as well. Some of the criteria which must be fulfilled by an NRI in order to purchase life insurance in India are given below:
The person must have had held an Indian passport at some point in time.
One of the parents or grandparents of the individual must be Indian and should have been a citizen of India according to the Citizenship Act, 1955.
The person must have a spouse who is an Indian citizen or must be referred by a person having Indian citizenship.

Choosing the insurer- Just like any customer, an NRI, must first of all, choose an insurer who provides him/her with the option of purchasing life insurance. For example, if Rohan is an NRI who is staying in the U.S.A and wants to purchase life insurance for himself, then he must not only check whether the insurance company he is interested in provides an insurance policy but also should properly research and compare various other plans before settling down on the plan he feels is most suitable for him. He must also check their claim settlement ratio, the track record of the company, etc. before purchasing insurance for himself. There are few insurance companies such as Max Life Insurance, LIC, SBI Life Insurance, Kotak Life Insurance, and ICICI Prudential Life Insurance that provide the option to an NRI to purchase life insurance. They also help their customers out with documentation and other formalities and also have NRI centres in order to make the whole process easy in nature.

Information related to tax- This is one of the most important factors that a person must look into. The tax implications will be different for different countries and hence, people purchasing life insurance must look into the tax rules before taking a call regarding the buying of insurance. A policy cycle can be divided into three cycles which are accumulation, investment, and maturity. Though tax laws in India completely exempt these three cycles from getting taxed, the same may not be applicable in the person’s country of residence. Hence, it is always recommended that people consult a tax advisor before purchasing insurance for themselves.
Mode of payment- The individual must be sure regarding his/her mode of premium payment. Any confusion regarding the payment of premium must be addressed immediately or else he/she might face a lot of trouble later. If the policy is foreign currency-denominated, the person will have to pay via NRE/FCNR account. If the scheme is Indian currency-denominated, then the policyholder will pay via NRO (Non Resident Ordinary) account.
The medical examination procedure- If the person is purchasing life insurance, he/she will surely have to go through a medical examination. The customer can either visit India and go through the procedure, the cost of which will be borne by the insurance company, or visit one of the medical facilities tied up with the insurance company in the country of his residence and send the report to the insurer in India.

Documents needed in case of making a claim- The policyholder will need certain documents in order to file a claim which are:
The policy document which must be original.
A valid identity proof of the beneficiary/nominee.
Death certificate of the policyholder which must be attested by the Indian Embassy.
The attestation by the Indian Embassy may not be required if the insured dies while being on a visit to India.

Why should an NRI purchase insurance in India?
One of the simplest ways to look at it is the NRI has family in India who are dependent on him/her and the person feels that they will face problems in filing for a claim then it is recommended that he/she purchases a life insurance plan in India.
One of the other reasons an NRI may purchase insurance in India is if he/she has moved to a foreign country for only a few years and intends to come back to India, then it is advisable to purchase a life insurance plan in India.

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