Term plans, or term insurance, are designed to provide financial protection to a family in the unfortunate event of the policyholder’s passing. Their affordability and high coverage have made them popular, especially for safeguarding loved ones during critical or unforeseen situations.
Eligible NRIs can also secure specialized term insurance plans online, simplifying access to essential financial protection across borders.
What is Term Insurance?
Term insurance is a protection plan that offers financial support to someone’s family in case of an untimely death during the policy term. For NRIs, it’s a smart way to ensure their loved ones in India remain financially secure, even if they are based overseas.
While many NRIs explore investment-based options, a simple life insurance plan like term cover is often the most affordable and effective way to protect dependents.
Can NRIs Buy Term Insurance in India?
Yes, NRIs can buy term insurance in India from the leading insurers. The Insurance Regulatory and Development Authority of India (IRDAI) allows NRIs, Persons of Indian Origin (PIOs), and Overseas Citizens of India (OCIs) to purchase policies while residing abroad or during their visits to India.
Insurers offer many online application options, and some even allow remote medical verification, making the process more accessible for those living overseas.
Eligibility Criteria for NRIs Applying for Term Insurance
NRIs must meet specific eligibility requirements before applying for term insurance in India. Meeting these criteria ensures a smooth application process and access to reliable life cover while living overseas.
Who Qualifies as an NRI?
To apply for an NRI term plan, you must be:
- An Indian citizen residing abroad
- A PIO or OCI with valid Indian roots
- Within the insurer’s eligible age range (typically 18–60 years)
Meeting the eligibility criteria is the first step in securing your policy.
Documents Required for NRI Term Insurance Plans
When applying for life insurance in India as an NRI, the following documents are required:
- Completed application form
- Passport copy with visa details
- Proof of residence (local and overseas)
- Income proof (salary slips, ITR, or bank statements)
- Recent passport-size photographs
- Foreign address declaration (if applicable)
Having all the paperwork in order and ready ensures a smoother application process and quicker policy issuance.
Medical Tests and Policy Issuance for NRIs Buying Term Insurance Plans
Medical tests are often a key part of the process for NRIs applying for term insurance, especially for higher cover amounts. This step ensures accurate risk assessment and tailored life cover based on individual health profiles.
How Medicals Work
Medical tests are usually mandatory, especially for higher sum assured plans. NRIs can get these done:
- During a visit to India at authorized diagnostic centers
- In their country of residence, if the insurer permits overseas tests
Policy Issuance Timelines
Once the insurer receives the test results and verifies documents, the policy is usually issued within 7–15 working days, depending on the insurer and underwriting process.
Some insurers also offer “no medical” policies up to a certain coverage limit, but this may depend on your age and health history.
How Premium Payments Work in Term Insurance for NRIs?
NRIs can pay term insurance premiums through NRE, NRO, or foreign bank accounts depending on the insurer’s options.
Premiums for NRI policies can be paid using:
- Non-Resident External (NRE) accounts
- Non-Resident Ordinary (NRO) accounts
- Foreign bank accounts (if accepted by the insurer)
Payments can be made in Indian Rupees (INR), and many insurers allow online payment through debit cards, net banking, or international remittances. Choose from annual, half-yearly, quarterly, or monthly premium options based on your convenience.
Claim Process and Payouts for NRI Nominees
In the unfortunate event of a loss, the nominee can initiate a claim from anywhere. Most insurers offer the convenience of online or email-based claim filing, with original documents to be submitted thereafter.
Key Steps in the Claim Process:
- Notify the insurer and submit a claim form
- Provide the death certificate and policy documents
- Submit identity and address proof of the nominee
- Additional documents may be requested, depending on the claim’s nature
Once verified, the insurer processes the payout to the nominee’s bank account within 30 days. Some policies allow payouts in foreign accounts, subject to RBI and insurer guidelines.
Things NRIs Should Keep in Mind Before Buying a Policy
There are several things NRIs need to keep in mind before purchasing a policy.
1. Currency & Payment Flexibility
Check if the insurer allows foreign currency premiums and repatriation policies for claims paid out in India.
2. Tax Implications
Understand the tax benefits available under Section 80C and Section 10(10D) of the Indian Income Tax Act. While the policy is tax-exempt in India, consult a financial advisor regarding tax liability in your country of residence.
3. Choose a Reliable Insurer
Always choose a company with strong claim settlement ratios and international service support; choosing those options will provide you with maximum benefits.
Term insurance offers NRIs a simple, affordable way to safeguard their family’s future in India. It’s an essential part of any long-term financial plan with flexible options, easy online access, and globally recognized coverage.
From eligibility to claims, the process is now more seamless than ever. By choosing the right life insurance plan, NRIs can gain peace of mind- knowing their loved ones are protected, no matter where life takes them.
