Will My Term Insurance Be Valid Even After I Move Abroad?

If a term policy’ insured dies outside India during the policy term, the nominee is entitled to receive the death benefit compensation as per policy guidelines. Although, there is no particular documentation required from the insurer when the policyholder goes abroad on a personal or professional assignment, it is advisable to notify the insurer’s home branch about his relocation.

Can NRIs Procure A Term Insurance Policy In India?

• An NRI (Non-resident Indian) is defined as an Indian citizen who has been living abroad for employment, business or on any other purpose, or an Indian citizen who resides in India for less than 182 days during the course of the preceding financial year. Here are some key points to be kept in mind about term insurance for Indians relocating to another country or Non-resident Indians (NRIs):
• At the time of policy purchase, the policyholder must be an Indian citizen. This shall ensure coverage to the insured, even when he travels or stays abroad for the purpose of employment or education.
• The policyholder must not have applied or must not be planning to apply for citizenship on foreign soil in the near future.
• However, an NRI who has no term insurance policy in India while relocating abroad but is willing to buy one can do so in two ways:

1. Purchase a term policy in person whenever he’s in India next by taking care of the procedural and underwriting formalities. Once these formalities are completed, the term policy availed by the NRI shall be considered as any other policy by an Indian citizen.
2. An NRI can purchase a term policy from India by residing in the foreign country via Mail Order Business facility. The policy purchase is subject to verification by a notary, Indian diplomat, or an official of the concerned Indian embassy abroad.

Features Of NRI Term Insurance Policies

1. Policy Term

The tenure of term insurance policies for NRIs usually ranges between 6 months and 25 years. The minimum entry age is 18 years and maximum age varies between 55 years and 60 years depending upon the health and age of the NRI at the time of purchase.

2. Sum Assured

The sum assured has a fixed range between Rs. 2 lakhs and Rs. 1 crore. In the event of the NRIs death, the sum assured, or death benefit is paid to the nominee in his/her NRE (Non-Resident External) account. It depends on the nature of NRI’s job, country of residence and income of the policyholder.

3. Premium

There is no fixed premium amount and the amount depends on several factors such as policy term, sum assured, payment frequency, and riders chosen, if any. The premium can be paid online through remittance in foreign currency or the policyholder's NRO/NRE bank account. The premium payable is the same for resident and non-resident Indians for a given sum assured.

4. Documentation

An NRI shall need to submit the following documents to the insurer to initiate the policy enrolment – proposal form, Age and income proof, health report, attested passport copy, application fee equivalent to the first premium payable, etc. Other additional documents such as proof of income in the form of income tax returns, copy of employment contract reflecting the pay compensation, certificate from a chartered accountant, personal financial questionnaire, etc. also have to be submitted to the insurer if an NRI wants to procure a term policy via Mail Order Business by residing in a foreign country.

5. Policy Renewal

Few term plans offer a renewal option to the NRI policyholder at the time of its maturity. For this, he shall be required to undergo and pass some medical tests to meet the renewal criteria. Also, NRIs must ensure that they don’t default on the premiums or delay the premiums during the policy term, in order to maintain a good track record.

Claim Initiation

In case of death of the NRI term insurance policy holder outside India, here are some additional documents that need to be submitted to the insurer to initiate the claim process other than the regular documents such as claim Intimation form (duly filled and signed), original policy document, copy of Address and Identity proof:

Employer certificate along with leave and contact details
Embalming certificate by the embalming establishment, if the body has been embalmed to preserve it on death
Copy of death certificate verified by the Indian Embassy located in the country of death
Translation of the above documents, if their originals are not in English

Conclusion

Term insurance for NRIs is a huge step by the Indian insurance industry given the large presence of the Indian diaspora abroad and their elderly parents and dependents who live here back home. However, it is important to note that not all NRIs can avail the term insurance cover since Indian insurers do not service NRI customers in foreign countries that are troubled, or strife torn such as some Middle eastern or African countries.a]]