Term insurance provides coverage for a predefined period. It helps with financial aid in case of a policyholder’s death. Numerous, including salaried, self-employed, and NRIs prefer it for several reasons. Here, understand why term life insurance for NRIs is a perfect choice.
What is Term Insurance?
Term insurance is a form of life insurance plan that pays for a stipulated term or time period. In case of the policyholder’s untimely death, the nominee is paid the sum assured. There is no savings feature present in a term plan like all other insurance plans. If you want more out of your policy without increasing the premium, then you can take a term insurance plan with return of premium options.
Why NRIs Should Consider Term Insurance?
For NRIs, buying term plans or any other type of life insurance may not be the same as buying these policies for resident Indians, but the benefits it may offer your family back home might be worth every rupee you spend on it. Let’s look at some reasons why NRIs should purchase term insurance.
Family Future Financial Security
One of the primary reasons NRIs opt for a term insurance plan is to ensure that their families are financially stable after their death. The term insurance coverage amount can take care of all daily expenses, current loans, and other needs, such as children’s higher education or marriages.
Reasonable Premium Amount
Term insurance plans generally come with a relatively low premium cost. This facilitates NRI policyholders to afford proper coverage for their dependents without burdening themselves much. Therefore, term insurance should be an integral part of financial planning for NRIs who desire to ensure the financial future of their family members without affecting their finances much.
Deductions of Tax
The premium paid for term insurance policies is eligible for tax benefits as per Section 80C of the Income Tax Act. Thus, NRI policyholders can also save tax by purchasing term insurance.
Simple to Manage
Term life insurance plans are less complex to handle. NRIs having life insurance in India can easily simplify a number of procedures, particularly if there are family members back in the country. Your nominee will be able to easily take care of the claim process if the policy is based in India.
Eligibility Requirements
NRIs need to fulfil some qualifying criteria to get term insurance coverage. Here are the common conditions to be met.
- Be in the age group of 18 to 65 years
- Provide documents like a valid passport, visa, and proof of foreign address to prove their NRI status
- Go for medical tests if the insurance company asks for it
How NRIs Can Purchase Term Insurance Plans?
Here are a few things NRIs should consider before buying a term insurance plan.
Assess the Coverage Amount
Make sure to undertake a complete review of the coverage required to ensure your family’s future. There are a few things an applicant should look for, including pre-existing loans, education-related expenditures, and general household expenses.
Compare Various Term Plans
Shortlist and compare the term plans of various insurance companies. It will help you to find a wide coverage term plan with a reasonable premium cost. The applicant can use automated online tools like term insurance calculators for calculating premium costs with respect to the policy term and sum assured before applying.
Choose the Policy Term
Choose a term policy based on your financial goals and age. Your term plan should cover the years your dependents will rely on your income.
Fill up the Application
You should complete the application with relevant information about yourself and your financial condition. You must fill out the correct details relating to your health, background and lifestyle, as misleading details can result in claim rejection.
Submit Necessary Documentation
Submit the necessary documents related to identity, address, income, and NRI status. You may also be asked to submit documents related to your medical history and good health declaration.
Health-related Tests
If the insurance company asks for health tests, then you need to visit a registered healthcare centre for those. The expenses for the tests will be borne by the insurance company.
Make the Premium Payment
Once you have completed all the formalities, pay your first premium to activate the term plan. You can even pay with international credit or debit cards or online.
Key Features
Higher Sum Assured: Term insurance plan provides adequate coverage for your family’s financial security.
Flexible Payment Options: Term insurance plans offer flexible plans for premium payment. It can either be a monthly, quarterly, semi-annual, or yearly payment.
Policy Term Options: The applicant can choose a term that best suits their financial goals and requirements.
Choice of Riders: There are various rider options available wherein the applicant can increase the coverage. These include: critical sickness, accidental death, and premium waiver.
Global Coverage: Term insurance plans offer international coverage to safeguard your family regardless of the location you live.
Conclusion
The term insurance plan is crucial for everyone, including non-resident Indians, as it helps support the families of policyholders in case of their demise. Therefore, by knowing all the benefits and eligibility requirements, you can make a wise decision and ensure a financially safe future for your family.
