NRIs can access protection plans in India under the foreign exchange management act (Fema), which allows people to protect themselves and their families whether they live in the country or not, according to Mahavir Chopra, director of health, life & strategic initiatives at insurer Coverfox.
In an article written for publication Money Control, Chopra answered some of the most pressing questions NRIs have about securing life insurance.
Do I have to live in India to buy life insurance?
No – this is not compulsory, although it may differ from company to company. The best way to buy life insurance for NRIs is by going online. That way, you can compare all available options to find the best plan and buy it instantly.
Though not a requirement, being present in India while buying a life insurance plan is highly beneficial. If you are in the country, the insurer can carry out (and pay for) the necessary medical assessments.
Some insurers, however, have been setting up offices in major foreign countries.
Does it matter where I live?
Yes – life insurers pay close attention to the applicant’s country of residence. A country that is more prone to civil or military issues, has an unstable government and constant violent attacks are labelled as high risk.
In contrast, countries that are generally peaceful, have a stable government, proper law and order are labelled as low risk.
If you reside in a high-risk country there is a greater chance your application will be rejected or your premiums will be much higher.
How can I pay the premiums?
This can be done by remittance in a foreign currency or through a non-resident ordinary (NRO) / non-resident external (NRE) / foreign currency non-resident (FCNR) bank account.
If the life insurance policy is issued in a foreign currency, the premiums will have to be paid from an NRE or FCNR account. If denominated in rupee it will be through an NRO account.
How can I receive a pay out?
As above, benefits paid from a life insurer will also be in the currency denoted in the policy document.
