Best Life Insurance Policies for NRI’s Benefits

If you are an NRI (Non-Resident Indian) and wish to purchase Life Insurance Policy in India either for the security of your loved ones or just for investment, you have plenty of options. There are insurance plans designed specifically for NRI’s. You must satisfy your eligibility criteria, and then you may choose the best life insurance policy that fits your needs from the various providers.

Rules and Regulations for NRI’s for applying for Life Insurance

  1. An NRI is an Indian citizen with a valid Indian passport who temporarily resides abroad.
  2. NRI must not hold a Green Card. He must be in the process of applying for citizenship of the country of his residence.
  3. Persons of Indian origin holding foreign nationality are not eligible except under the following circumstances:
  4. The person has earlier held an Indian passport at some point in time.
  5. The individual, parents or grandparents were Indian citizens according to the Indian Citizenship Act.
  6. The spouse of the individual is a citizen of India.
  7. NRI’s can complete the insurance formalities on one of their India visits.
  8. Proof of income, a copy of the employment letter, and other details about personal finances must be furnished.
  9. The insurance policy can be issued in Indian or foreign currency depending upon the insurance company rules.
  10. If the policy is issued in Indian currency, premiums are paid through the respective NRO account of the holder.
  11. Even though the insurance policy is taken in India, the coverage is for demise occurring anywhere in the world.
  12. If the policy is disbursed in India, the sum assured is exempted from tax, but if the earnings are in foreign currency, the insurer has to pay tax as per the rules in his country of residence.
  13. In case the insurer resides in what is known as a “high-risk country”, his premium will be more.

Choosing your Insurance Provider

There are several companies offering the best life insurance plans cover for NRI applicants. Some of them along with their features are listed below:

  1. Max Life Insurance

Entry Age: 18- 60 years

Minimum Amount of Sum Assured: 25 Lakhs

Maximum Amount of Sum Assured: None.

The term of the Policy: 5 years- 35 years

Age for Maturity: 70 years maximum

Tax Benefit: The premium paid under this policy is eligible for tax deduction under section 80 C of the income tax act. The sum assured is eligible for tax deduction as well as per section 10 D of the income tax.

Policy Features:

The Max Life Insurance policy can be purchased by NRI’s, Person of Indian Origin (PIO) or foreign nationals.

The first premium is payable through Indian Currency via NRO account or in the way of foreign currency equivalent to the amount in rupees.

Maturity amounts and bonuses will be paid in Indian rupees.

The reimbursement of maturity amounts, surrender value and claims amount can be done out of India as well.

Policy Exclusions:

The policy becomes void if the death is due to suicide.

The policy becomes void if the individual is involved in illegal activities.

Rider: There is an accident benefit add-on clause that covers any unexpected accidents.  

  • Birla Sun Life Insurance

Entry Age: 1 – 60 years

Minimum Amount of Sum Assured: 2 Lakhs

Maximum Amount of Premium Payable: 18,000

Term of the Policy: Up to the age of 100 years.

The term for paying a premium: 15 years – 40 years

The frequency of premium payment: quarterly, monthly, semi-annually and annually.

Tax Benefit:  The premium paid under this policy is eligible for tax deduction under section 80 C of the income tax act. The sum assured is eligible for tax deduction as well as per section 10 D of the income tax.

Policy Features:

After the entire policy premium is paid off, the insured gets 5% of the sum assured plus a bonus every year.

The insurance policy coverage is valid for insured and his family until he is 100 years old.

If the sum assured is high, the insured is eligible for premium rebates.

You can avail of the added rider options for extra coverage in this policy.

If no nominee is mentioned, the legal heir of the insured becomes the beneficiary for the policy proceeds.

Policy Exclusions:

If the death of the insured occurs due to suicide within a year of purchasing the policy, it will be terminated.

Any incorrect or misleading information given will lead to termination of the insurance policy.

  • Kotak Life Insurance

Entry Age: 18 – 65 years

Minimum Amount of Sum Assured: 25 lakhs

Maximum Amount of Sum Assured: None

Term of the Policy: 5 years – 40 years

Age for Maturity: 23 years minimum, 75 years maximum.

Tax Benefit: The premium paid under this policy is eligible for tax deduction under section 80 C of the income tax act. The sum assured is eligible for tax deduction as well as per section 10 D of the income tax.

Policy Features:

Kotak Life insurance for NRI’s provides a high amount of coverage for reasonable amounts of premium.

The policy provides exclusive premium rates for women and non-smoking applicants.

Some of Kotak’s other investments can be converted to life insurance before the last five years of the term of the policy is over.

There are optional rider clauses in this policy such as:

A portion of the sum assured can be disbursed on account of any critical illness.

On death due to the accident, the whole sum assured amount is paid off.

If a permanent disability claim is submitted, payments will be made via instalments.

  • Life Insurance for India

Entry Age: 0 to 50 years

Minimum Amount of Sum Assured: 10 lakhs

Maximum Amount of Sum Assured: Depends on insurance conditions.

Policy Features:

Insurance policy amounts are issued in Indian currency only.

NRI applicants can buy insurance and complete paperwork from their residing country as well. This method is called “Mail Order Business”.

Under Mail Order Business technique, the maximum amount of sum assured will be three crores.

NRIs are also eligible for insurance under the special or non-medical scheme of LIC subject to certain terms and conditions.

The above insurance companies have been dealing with NRI life insurance for a long time and have been able to develop a streamlined process for the same. Comparing the features will help you decide which one will be the best life insurance plans for NRIs life insurance needs.

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