Is Your Term Insurance Valid If You Move Abroad?
Term insurance offers support to your family when you are no longer with them. The design has attracted a lot of interest because it is straightforward, inexpensive and has term insurance tax benefits. As a result, it makes sense that non-resident Indians (NRI) and people of Indian origin (PIO) might think about purchasing a term insurance policy.
Can you buy term insurance outside of India?
The response is “yes,” it is. NRIs and PIOs are both permitted to buy a term insurance policies issued by insurers with headquarters in India. Before we discuss the requirements for NRIs and people of Indian origin (PIOs) to purchase term insurance in India, let’s clarify who each of these terms refers to (PIO). They can trace their birth, ancestry, or origin to the Republic of India and are either Indian citizens or foreign persons of Indian descent.
The process for buying term insurance is essentially the same for residents and non-residents, with a few minor variations.
Another concern that can come up is whether term insurance will pay out in the event that an Indian national passes away abroad. The response is “yes,” it is. A natural demise occurs regardless of location for a brief journey in most cases. However, it is possible that after buying term insurance as an Indian citizen, you end up having to relocate abroad for work or other reasons within the policy’s term. After acquiring your term plan as an Indian citizen, you might be regarded as an NRI. In this situation, you must let your insurance know that you want to settle abroad. The location you are moving to and the hazards involved will determine a lot.
The steps involved in purchasing term insurance
While in India, NRIs can buy term insurance of their choice by approaching an insurer directly or through an agent. The insurer may request a medical history and gather data such as the resident’s country of residency when assessing the case. Following that, one will have to pay premium fees in accordance with the conditions of the selected insurance.
You can also obtain coverage while still in your home country—in this case, India—from an insurer there. If the insurer is situated in India, it will be simpler for your dependents to file a claim in the terrible case of your passing, which can be very helpful if you have family in your own country. You can calculate the average costs of your premium using a term insurance calculator.
Benefits of term insurance and other crucial characteristics
The credentials needed may differ between insurance companies. However, the following is the most typical paperwork that you will be asked to provide:
- An attested copy of your passport.
- The properly completed application or proposal form.
- Documents proving your identification, age, place of residence, source of income, and medical reports obtained after a health examination at the time of application. Additionally, as stated in the conditions of the insurance you choose, you will also be obliged to pay the insurer an amount equal to the first payment instalment.
Here are some additional documents that must be provided to the insurer in addition to the standard ones in order to begin the claim procedure in the event that an NRI term insurance policyholder passes away outside of India.
- Verified death certificate copy from the Indian Embassy in the nation of death.
- Employer certification includes leave information and contact information.
- Cause-of-death report
Duty to submit documentation of medical history
Additionally, you should be aware that if your insurer seeks information about your medical issues, you are required to supply it. Your insurer must be informed of any pre-existing medical conditions you may have. Both NRIs and locals are required to fulfil this responsibility. Insurance firms may, however, perform telemedical exams on their NRI clients. Most significantly, if your insurer discovers that you have concealed any crucial information from them, your insurance coverage may no longer be valid.
Given the huge Indian diaspora overseas, the answer to the issue “Is term insurance valid outside India?” is particularly important. A wise first step in building a safety net for your finances is to purchase term insurance and avail of the term insurance tax benefits. The tax benefit is subject to change in tax laws. The term life insurance coverage is not available to all NRIs; it is crucial to remember, as many Indian insurers adhere to a list of nations that do not provide services. It is crucial that you determine whether the neighbourhood where you live is considered a high-risk region. Comapare different term insurance plans and use a term insurance calculator to help you make a decision.
The tax benefits mentioned in the article may not apply if you opt for the new tax regime since many tax exemptions and deductions have been scrapped within the new regime.
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.