Life Insurance for NRIs (Non-Resident Indians)

Life insurance policies in India can be bought by different categories of applicants apart from resident Indians such as:

Non-Resident Indians: These are citizens of India with a valid Indian passport who are temporarily residing in a foreign country.

Person of Indian Origin (PIO)/Overseas Citizen of India (OCI): These terms refer to citizens of foreign countries other than Pakistan or Bangladesh who fulfill one of the below criteria –

• Applicant had held an India passport earlier
• The Applicant or his/her parents or grandparents were Indian citizens by virtue of the Citizenship Act, 1955 or Constitution of India
• The applicant is the spouse of an Indian citizen

Foreign Nationals: This refers to citizens of a foreign country who are residing in India.

The above groups of applicants are allowed to purchase life insurance policies in India commonly referred to as NRI life insurance plans. The eligibility criteria and documentation required for these insurance plans may vary to some extent from one insurer to another. However, one must keep in mind that life insurers in India have to follow some rules and restrictions when offering NRI life insurance to residents of some countries. This list of prohibited countries is usually available on the life insurance company’s website.

Non-resident Indians who want to purchase life insurance in India have a few different options to choose from depending on their unique requirement and life stage. Some of the popular types of NRI life insurance plans available in India are:

NRI Term Plans: Term life insurance policies for NRIs offer death benefit similar to term plans offered to resident Indians. These are pure protection plans where the insurance company pays out the sum assured only if the policyholder does not survive the policy term. NRI term plans from most insurers also provide the option of availing add-ons like critical illness cover, accidental death and disability cover, etc. to enhance the coverage offered by the term insurance policy.

Child Plans for NRI: NRIs can also purchase child plans to secure the future of their children in the case of unexpected demise of the policyholder. These life insurance plans are primarily designed to help NRIs save for key life goals of their children such as higher studies while providing add-on benefits like waiver of future premiums in case of the death of the policyholder parent.

NRI Retirement Plans: Insurers in India also allow NRIs to invest in retirement plans that can provide a monthly income after retirement through purchase of annuities. These NRI plans can help them plan their retirement so that they can secure their finances even after they are no longer earning a regular income post-retirement.

ULIPs for NRIs: Unit Linked Insurance Plans or ULIPs are type of insurance policy that combine the benefits of life insurance and investment in a single package. NRI ULIPs work in exactly the same way as ULIPs for Indian residents. So, the policyholder’s family members get death benefit in the case of the policyholder’s demise during the policy term. If the policyholder survives the policy term, they get returns based on the performance of the ULIP.

The documentation requirements for NRIs purchasing life insurance policies in India are slightly different from the documents required if a resident Indian is purchasing a similar plan. While the list of documents required for KYC (Know Your Customer) requirements may differ slightly from one insurance company to another, below are some examples of address documents that can to be submitted purchasing a NRI life insurance policy:

• Resident Card/National Identity Card issued by Government of country of resident (including passport with overseas address)
• Driving License issued abroad containing overseas address
• Telephone/Gas/Mobile/Water or other utility bill featuring overseas address
• Copy of credit card statement with overseas address (max. 3 months old)
• Copy of valid work permit/resident permit featuring overseas address
• Employer’s certificate for proof of overseas address (also applicable to Merchant Navy applicants), etc.

In addition to the above overseas address proof, NRI life insurance applicants would also need to provide valid age proof, income proof, copy of passport, and undergo a medical test/video medical test as part of the application process. The exact KYC process may vary to some extent from one life insurance company to another.

In the case of NRI life insurance policies, bonus payouts, maturity proceeds, surrender value or payout of claims can be made in Indian rupees or in foreign currencies like US$, Euro, etc., depending on the choice of the claimant. However, insurers are required to follow some key rules with respect to such remittances:

• Insurer remittance in foreign currency are allowed only as per the proportion of premiums that have been made in foreign currency
• If premium payments are made in non-repatriable Indian rupees, payouts by the insurer are allowed only in India rupees credited to the NRO account of the beneficiary. This is also applicable in situations where death claims are settled in favor of non-resident nominees/assignees.

There can be other remittance rules for NRI life insurance plans that can differ from one life insurance company to another.