Term Insurance for NRIs in India

If you are the only earning member in your family, it is important to ensure the financial security of your loved ones in your absence. A term insurance policy is an affordable and simple way to provide financial security to your family.

A term plan is a pure life insurance cover that pays the benefits to your nominees if something untoward happens to you during the policy duration. Because most term plans do not have any maturity benefits, the premium is lower compared to traditional policies like endowment and money-back policies. This offers an affordable way to avail of higher coverage for your family and ensures their monetary stability.

Most people are unaware that even Non-Resident Indians (NRIs) can avail of term insurance in India. If you are an NRI, here are two ways in which you can buy a term plan:

  • You can purchase it while visiting and after the insurer completes the underwriting formalities; a term plan will work like other regular policies
  • You can invest in the policy while living abroad via the Mail Order Business; an official at the Indian Embassy in your country of residence will verify the policy; if you are a student, your supervisor or dean can validate the same 

Here are three features of term insurance for NRIs:


  • Sum assured (SA) and premium


Insurers provide up to INR 1 crore SA for NRIs, which may vary among insurers. The premium depends on aspects, such as your age, SA, policy duration, premium payment frequency (monthly, quarterly, semi-annually, or annually), and additional riders included in the basic plan for enhanced coverage. You can use an online term insurance calculator to determine the approximate premium payable for the chosen policy.


  • Renewal and grace period


You will need to renew the policy at regular intervals as per the terms and conditions to ensure continued coverage. You need to pay the policy’s renewal premium on or before its due date to make sure that the insurer does not cancel it.

Most insurers provide a grace period, which is a particular number of days after the date when the premium is due. If you pay the premium before the grace duration end, you can get uninterrupted coverage. In case you do not pay the premium, the policy will lapse, and you will have to buy a new plan after completing the necessary formalities.


  • Documentation requirements


Some of the documents that you will need to submit include the proposal form, income and age proof, medical condition report, first premium amount, and an attested copy of your passport. If you buy the term plan via the Mail Business Order, you may have to share additional documents. You can check the details of the same on the insurers’ websites. Some insurers have different categories based on various criteria like the nature of your job, your income, and the country of your residence. The insurer may provide different SA and premiums based on these factors. You can estimate the potential premium using the term insurance calculator available on the insurers’ websites. 

Term plans for India are available for NRIs who are aged between 18 to 60. The maximum age for coverage may differ from one insurance company to another, and you can check the details on their website. 

You can pay the premium via Internet banking if you hold an account with an authorized bank offering electronic transfer services. Analyze the terms and conditions with your bank to ensure smooth and secure online transfers of the premium. Some of the payment options include foreign currency remittances, non-resident external (NRE), non-resident ordinary (NRO), and foreign currency non-resident (FCNR) bank accounts.

Before you buy the policy, understand the term plan meaning and all the conditions related to it to avoid any issues in the future.