Non-resident Indians (NRIs) are increasingly opting to purchase term insurance plans from India. Online insurance marketplace Policybazaar has attributed this growing demand for term insurance to affordability and convenience, among other factors. The marketplace has recently reported a surge in NRI customers for term insurance plans from India via its online platform.

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Why Are More NRIs Choosing Term Insurance From India?

Rhishabh Garg, Business Head of Term Insurance at Policybazaar.com, highlights three factors contributing to NRIs preferring India for their term insurance plans:

– Ease of buying: The processes associated with purchasing term insurance in India are relatively easier for NRIs than in other regions, even in their country of residence.

– Convenience: It is relatively convenient for NRIs to have term insurance from their country of origin as often they do plan to return at a certain age. Moreover, the term plans here offer tax exemption at the time of purchase (when purchased via the NRE accounts).

– Affordability: The consumer-centric features in term plans from India are increasingly appealing to NRIs, which include return of premium at no extra cost, early pay-outs for terminal illness, premium waivers for permanent disability, and immediate pay-out of up to Rs 2 lakh on claim intimation for immediate obituary expenses.

Uptick In Demand From Gulf And EU Nations

“We are witnessing exponential growth in term insurance purchases from NRIs, particularly from the Gulf nations and select European countries,” says Sarbvir Singh, Joint Group CEO, Policybazaar. The growing interest is attributed to benefits offered by Indian insurers, such as competitive pricing, larger covers, and streamlined processing through video/tele medicals.

The demand among the 18-60 age group has seen a 130 per cent year-on-year growth, with India emerging as the preferred choice for NRIs in the US, UK, Canada, UAE, and Singapore.

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Moreover, term policies from India cost up to 30-50 per cent less for NRIs in the UAE and Singapore. “This may be due to high term insurance costs in the residence countries,” Garg notes.

Demand Credited To These Unique Benefits

NRIs get special advantages in the short and long term when they buy term policy from India, such as:

Instant Tax Exemption: NRIs are eligible for an 18 per cent GST exemption upon purchasing term insurance plans from India when paying via their NRE accounts. “The NRIs don’t have to claim this later as they get this exemption at the time of buying the policy through their NRE accounts,” Garg informs.

Tele-medical check-ups: Additionally, policies with coverage of up to Rs 5 crore can be easily obtained with tele-medical check-ups from India, which eliminates the need for physical visits.

The policies that have coverage above Rs 5 crore may require them to make a physical visit. “In cases of certain medical conditions like diabetes, heart-related problems, etc., the NRIs may require a physical examination,” Garg says.

Easy Processes: Accessibility of these plans is further enhanced through seamless processing for NRIs, whose average annual income exceeds Rs 35 lakh.

Longer Coverage: “Unlike many countries that have limited coverage, like the USA, and some that give restricted policy terms, Indian term plans offer coverage for longer durations, extending up to 99 years,” Garg says, highlighting how nuanced benefits like these get more preference.

“Imagine an NRI who wants to buy life coverage at age 35. He would rather have term insurance that gives him coverage till, say 80, 85, or 90, than those which only cover till 60,” Garg explains.

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A Quick Glance At NRI’s Term Insurance Benefits From India:

• Return of premium at no extra cost
• Early pay-outs for terminal illness
• Premium waivers for permanent disability
• Immediate pay-out of up to Rs 2 lakh on claim intimation for immediate obituary expenses