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NRI Insurance Issues

As India evolves into a major destination for investment, there has been a natural spark amongst the NRI community to return to India. And as they repatriate with investment options, some of them are caught in the dilemma of their future course of investment plans.

As, an NRI from Boston Vishal Shekhar says, that like many of his friends he would also like to return to India in the near future. However, there are the issues of insurance policies which he is finding difficult to decide. He is confused as his friend are contemplating taking out insurance policies in the US though they are returning to India.

Actually, there are several policy announcements recently made pertaining to insurance policies issued by insurance companies registered with the Insurance Regulation and Development Authority in India. As per the rules and regulations, policies can be issued in foreign currency to resident PIOs who have returned to India after a stint of being NRI, provided the premium are paid out of remittances from foreign currency funds held by them abroad or from their Resident Foreign Currency (RFC) account with banks in India.

However, conversion of rupee policies on the lives of resident Indians into foreign currency or transfer of records of such policies to a country outside India is not permitted without prior approval of the RBI. Insurers may issue policies denominated in foreign currency through their offices in India or abroad to non-residents, provided the premium are collected in foreign currency from abroad or out of the Non-Resident accounts of the insured or his family members held in India.

For obtaining a policy an NRI has to undergo all the steps of obtaining a policy viz, filling of proposal form, medical examination report, moral hazard report and payment of premium.

Premium Payments

There are convenient modes of payment of premiums which include direct remittance from abroad through banking channels in the approved manner or by remittances through postal channels like Foreign Money Order.

  • By payment out of funds held in Non-Resident (External) Account or Foreign Currency (Non- Resident) Account with a Bank in India.
  • By cheques drawn by Non-resident policy holder on Bank Accounts held in India in his own name (either solely or jointly with another member of the family) whether or not the account has been designated as non-resident.
  • By cheque drawn on account maintained by resident parent or spouse of policy holder in their own name or joint names with other close relatives.
  • By the absolute Assignee in India wherever such policies have been absolutely assigned to a resident in India.
  • By the employers in respect of policies issued to their employees who have been deputed abroad by them.
  • Premiums can be paid in cash by a resident parent or spouse of the non-resident policyholder subject to his / her submitting a letter stating the relationship with the policyholder.
  • Premiums due on policies issued to Indian students who have gone abroad for higher studies may be collected in Rupees out of the Resident Bank Account in India or any of their representatives in India by cash or cheques.

Some insurance companies offering NRI Accident Insurance are National Insurance Company Ltd. and Policy for Non-Resident Indians and HDFC Tricare Plan. The insurance covers Non-Resident Indians from 3 months of age till 70 years. It is a comprehensive insurance scheme that covers everything from accidental loss, permanent disablement due to accident, medical expenses incurred due to illness in a foreign country to education fund of dependent children and others.

In the event of claim, written intimation must be given by the insured/assignee to the insurance company. Reporting on a company's toll free number is also an option. The lien of action is that upon receipt of the intimation of claim the company deputes its surveyor or claim representative and processes the claim. Copy of the claim format is annexed. The claim process can take anywhere between 7-15 days.

The documents required for NRI Accident Insurance Claim consists of Claim form, FIR Form, prescriptions given by the treating Doctor, hospital discharge card, diagnosis reports like the X-ray report and disability certificate.



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