With the world becoming increasingly interconnected NRIs (NRIs) have become integral to the Indian socio-economic system. While NRIs establish their lives and establish careers in foreign countries and develop their careers, they are often able to keep financial connections with India. One critical aspect of financial planning that shouldn’t be ignored is life insurance: specifically, term insurance. This blog focuses on the significance of benefits, eligibility requirements, documents, and the options under the term insurance for NRIs.
What is Term Insurance?
Term insurance can be described as the easiest and least expensive form of life insurance which provides financial security to your family members in the event of an unexpected death in the course of your time period. In contrast to other insurance policies which have maturity benefits, Term insurance is strictly security-focused.
Why is Term Insurance for NRIs Important?
When they live abroad, NRIs often face uncertainties in regards to the security of their jobs, immigration status or health insurance, among various other social-political issues. This is why it’s important for them to have the right financial protection that is in place.
Key Reasons Why NRIs Need Term Insurance:
- Family Security: Many of the NRIs live with their families in India. The term plan provides that dependents are financially secure in the event of the death of the policyholder.
- Credit Liability Insurance: Term insurance can help pay for large amounts of debt, such as student loans, home loans, and personal loans made from India or in other countries.
- Affordable Costs: Terms plans in India tend to be more affordable in comparison to international policy.
- Tax benefits The premiums you pay to term insurance could be suitable for tax deductions under section 80C under the Income Tax Act, even for non-residents of the United States.
- Rupee Denominated Policy In choosing policies that have INR as their currency, NRIs are able to limit the risks of foreign exchange and match this to their Indian financial obligations.
Who Qualifies as an NRI?
Before delving into details of the policies It is important to know what constitutes an NRI.
A person is considered to be to be an NRI If:
- They are in other countries than India for over 182 days during an entire fiscal year.
- It is Indian citizens living overseas.
- They constitute Indian citizens as well as Persons with Indian Origin (PIO) staying in the United States for work, business or in circumstances that indicate that they intend to remain in a foreign country for a period of uncertainty.
Read Also: LIC Tech Term Plan | Best Spouse Term Insurance Plans in India
Term Insurance for NRI: Key Features
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High Sum Assured
Non-residents of the country can choose an extremely high amount of money guaranteed ranging between Rs50 lakhs and multiple crores based on their income as well as their age and requirements.
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Flexible Premium Payment Options
The premiums are payable annually or semi-annually, monthly, or every month. The majority of insurers accept payments via NRE/NRO accounts in the bank.
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Online Application Process
Numerous Indian insurers provide an easy digital experience, allowing NRIs to make an application and purchase term insurance on the internet.
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Policy Term and Entry Age
The majority of term insurance policies cover for a period of time from 18-65 and a term lasting from 18 to 40 years.
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Medical Test Options
Based on the insurance company as well as your home country the medical exam may be necessary. Certain insurers permit tests to be carried out within your country of residency.
Eligibility Criteria for Term Insurance for NRI
For a person to be eligible to apply for the term insurance for NRI applicants should generally satisfy the following conditions:
| Parameter | Eligibility Criteria |
| Age | Ages 18-65 years |
| Residency | NRI, PIO, or OCI |
| Income | An income source that is stable (proof is required) |
| Documents | Valid passport, visa, income proof |
Be aware that eligibility can differ somewhat based upon the insurer’s internal guidelines for underwriting.
Documents Required for Term Insurance for NRI
Below are the most commonly asked documentation required when trying to obtain a term insurance policy in India in the NRI category:
- Copy of Passport (with Visa/Work Permit)
- Proof of Address (both Indian and Overseas)
- Income Documentation (Salary Slips, ITRs (or Form 16)
- Recent Photograph
- Age Proof
- Medical Record (if appropriate)
- NRE/NRO Account Details for Premium Payment
Best Term Insurance Plans for NRIs in 2025
Below are a few of the most highly rated Indian insurance companies that provide short-term insurance plans specifically for NRIs:
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HDFC Life Click 2 Protect Super
- Benefit options that can be customized
- Premium waiver alternatives
- Multiple payment modes
- It is available for NRIs in specific countries
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ICICI Prudential iProtect Smart
- Life cover for critical illness with rider
- Option to return premium
- The purchase of online products for NRIs
- High rate of settlement for claims
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TATA AIA Sampoorna Raksha Supreme
- Protection that is comprehensive with the addition of accessories
- Optional Return of Premium (ROP)
- Multiple death benefit payout options
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Max Life Smart Secure Plus
- Option to include the rider in case of disability or death
- Coverage for terminal illness
- Coverage for long-term duration up to age 85
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LIC Tech Term Plan
- Online available
- Basic life insurance
- Affordable premiums
- A very reputable Indian insurance companies
Countries Eligible for Term Insurance for NRI
Many insurers categorize nations in low, medium or high-risk areas. Non-residents living in countries with low risk such as those in the US, UK, Canada, Australia, Singapore, and UAE typically face fewer obstacles. But, NRIs who reside in countries that are high-risk could be subject to further inspections for underwriting.
Riders Available for NRIs
The term insurance plans of NRIs may be augmented with an optional rider:
- Accidental Death Benefit Rider
- Critical Illness Rider
- Waiver of Premium Rider
- Permanent Disability Rider
- Terminal Illness Rider
Adding riders to the mix expands the range of protection. They also provide protection against certain Life risks.
How to Buy Term Insurance for NRI
The following step-by-step instructions are provided for those who are NRIs and want to buy term insurance in India:
Step 1: Research & Compare
Make use of online aggregators or an advisor in the field of finance to evaluate terms plans with respect to parameters such as claims settlement ratios and premiums, benefits and riders.
Step 2: Choose the Sum Assured and Policy Term
Choose a sum that protects your financial obligations and liabilities. obligations.
Step 3: Fill the Application Form
The process can be completed online via the insurance’s site or through intermediaries. Be sure to provide accurate information, specifically regarding residency, employment and earnings.
Step 4: Submit Documents
Upload scanned copies of all required documents like passports, visas and income proofs, for example.
Step 5: Undergo Medical Tests
Make sure to schedule medical examinations if they are required. Certain insurers permit the test to be conducted within the country where you reside.
Step 6: Pay the Premium
Utilize the funds from your NRE and NRO account for making payments. Certain insurers will also take international credit card.
Step 7: Policy Issuance
When all conditions are satisfied After all the requirements have been met, the policy is sent to the recipient in soft copy format.
Claim Settlement for NRIs
In the event of the death of the policyholder the person who is a nominee has to:
- Inform the insurance company
- Passport duplicate, as well as other necessary documents
- Include bank account details (Indian as well as international)
Settlement of claims of NRIs are processed the same way as residents Indians however, it could require additional time if loss of life occurred in a foreign country.
Tax Benefits for NRIs
Tax benefits for NRIs are available for term insurance premiums as per Indian Income Tax law:
- Section 80C Amount of deduction as much as Rs1.5 lakhs each year
- Section 10(10D): Death benefits are exempt from tax
Notice: The tax benefits apply only when your income is tax-deductible within India. Foreigners must seek out an expert tax consultant to learn about tax implications within the country they reside in.
Common Mistakes to Avoid
- Hide Health or travel history Make sure you disclose the correct details to prevent rejection of claims.
- Doing nothing to help riders Riders have the potential to greatly increase the effectiveness of policies. So don’t ignore them.
- delaying application The cost of premiums increases with age. Therefore, it’s best to purchase early.
- Selecting Inadequate Coverage Do not underestimate the amount of money you can be assured.
- Do not nominate beneficiaries Choose nominators to facilitate the disbursement of claims.
Read Also: Term Insurance Terminology |What is Zero Cost Term Insurance
FAQs on Term Insurance for NRI
Q1. How do NRIs purchase term insurance from India on the internet?
Most Indian insurance companies have online platforms which NRIs can submit applications to upload documents and pay for premiums online.
Q2. What is the possibility that the test can be conducted in another country?
Many insurance companies permit NRIs to have medical exams within the country they reside in. In some instances, the insurer may will even pay for the expenses.
Q3: How do premiums collected on term insurance policies paid through NRIs?
Non-residents of the country can make payments using NRE and NRO account at banks, credit or debit cards, wire transfer or credit card.
Q4. Does income proof have to be a requirement in the case of NRIs?
The income proof document is essential as it determines your eligibility as well as the amount that is guaranteed. Accepted documents are ITRs as well as salary slips and Form 16.
Q5. What happens if the NRI is able to return to India for the last time?
The policy will continue without modification. The insurer must be informed regarding your changes in residence situation.
Q6: Is the term insurance benefits taxed when they are used by NRIs?
Death benefits that are that are received in accordance with section 10(10D) are not subject to taxation in India. But, taxes within the country of residence might apply.
Q7: Which one is the better option: buying insurance from India?
Indian long-term insurance plans tend to be cheaper and offer tax benefits in India and make these policies a popular choice by many NRIs.
Final Thoughts
The term insurance for NRI isn’t just an option for financial products, it’s actually an absolute necessity. It makes sure that your family members will be financially secure when you are not there wherever you’re located anywhere in the world. When you choose the best insurance company, knowing the policy’s terms and being transparent when you make disclosures, NRIs are able to reap all the advantages of Indian policy terms for very affordable prices.
If you’re an NRI, taking care of your family’s financial future with term insurance is an intelligent and wise decision that will give you tranquility today, and the security of tomorrow.