Life Insurances 243 views
If you are an NRI with having strong roots in India, you should consider buying a life insurance. Well, needless to say, the economy of the country is booming, and when it comes to making any investment on this soil, it will also give a boost to your finances. However, keeping this thing in mind, these days many life insurance companies have started offering the customized insurance policies so as to fulfill the requirement of NRIs.
So, read this article further to know about the list of 5 essential things that every NRI needs to bear in mind while buying a life insurance in India:
1. Check Your Eligibility
When NRIs and PIO want to buy life insurance in India, they need to fulfill the certain terms and conditions. Moreover, when it comes to NRI, it refers to an Indian National Resident Abroad for a specific duration, whereas the PIO is a citizen of any country except Pakistan or Bangladesh, if:
- an individual has had the Indian passport, any time in the past.
- an individual or either his parents or grandparents were the citizen of India as per the Constitution of India or the Citizenship Act, 1955.
- the individual is a spouse of an Indian Citizen or a person referred to in any of the clauses below.
Not only this, in fact, being an NRI you also need to have a valid passport issued by the government of India, if you are willing to have a life insurance in India. In case with PIO, if they come under any of the above categories, they can also buy a life insurance in India.
2. Choose Your Insurance Company
Once you are done with knowing the eligibility criteria, the next step is to find a suitable life insurance provider. Today, you have a wide range of life insurance companies, offering best insurance products to choose from. But, before choosing a company, consider some factors like pedigree of the management, track record, parent group's experience, and last but not the least claim settlement ratio. Well, no specific policies are being offered by insurance companies to non-residents, but it is also important to mention that few of the providers have actually customized their process, hence started offering the life insurance policies to NRIs.
3. Gather Information About Taxation
- Before you go for any sort of policy, it would be advisable for you to consider the tax laws in force both in India and in the location where you are living. Moreover, you also need to check the tax implications at every stage of the policy life cycle i.e. investment, accumulation and maturity. However, at present the tax law in India exempt all these three stages from tax, and ensure that it is same in the country. You can take a help from a specialist who can make you understand all the queries related to tax before you buy life insurance in India.
- Well, life insurance policies taken in India can be both comprehensive as well as reasonable. SO, you just need to evaluate the options vigilantly, before going further with any life insurance plan to invest.
4. Identify Your Mode of Premium Payment
It is good to check your mode of premium payment in advance so that you don't have to face in problem in the future. You can make the premium payment with the help of two ways, i.e.- one is via foreign currency, in which you pay the premium in foreign currency or via using your NRE/FCNR account. The other way is Rupee denominated, in which you pay the premiums in rupees with the help of using your NRO accounts.
For your reference, below is the table, showing you difference between FCNR, NRO and NRE accounts:
|Criteria/Accounts||NRE (Non-Resident External Account)||NRO (Non-Resident Ordinary Account)||FCNR (Foreign Currency Non-Resident Account)|
|Suitable For||An NRI who is having an income source only from abroad||An NRI who is having an income source in India as well as abroad||An NRI who wants to invest in India but, don’t want to take currency risk|
|Account Type||Saving , Current or Fixed Deposits account||Saving , Current or Fixed Deposits account||Fixed Deposit only|
|Can deposit money from||Abroad||India and abroad||Abroad|
|Currency of money deposit||Rupees||Rupees||Any of U.S. Dollar, Pound Sterling, Euro, Australian Dollar, Canadian Dollar|
5. Know About Medical Examination Procedure
Well, purchasing a life insurance clearly means that you need to face a medical examination procedure. And, there are two ways through which you can get it done. In the first way, you need to come down to India, and your insurer will have to bear all the medical expenses. Whereas, in the second option, you have to do it overseas, and send the report to your insurer in India. Also, you need to bear the cost yourself, until and unless you buy a policy targeted for non-residents, in which the insurer would have the tie-up with any of the medical facilities for the purpose.