A large number of Non-resident Indians (NRIs) working abroad have
their families and assets back home in India. Their tenure indefinite,
the need for an insurance cover is felt to take care of any uncertainty.
The Government of India has recognized the special needs of the
NRI and extended risk cover to non-residents at par with resident
Indians. Indians overseas can avail of on-line facilities on the
internet to buy and manage insurance policies from around the
globe. All schemes offered by insurance companies can be availed
of by NRIs.
Eligibility for NRI Insurance
NRIs staying abroad for employment or
business for an indefinite period
Indian citizens on an assignment abroad
with foreign governments or international agencies
Officials of Central and State Government
and Public Sector undertakings deputed abroad on temporary assignments
or posted to their offices abroad,
Indians who have migrated to other countries
on a permanent basis
Persons of Indian origin, who have acquired
citizenship of another country, can avail of all schemes except
certain joint life plans and plans having a term insurance element.
Payment for insurance policy
NRIs can pay for the policy in Indian currency. Insurance premiums
can be paid in the following ways:
By direct remittance from abroad through
approved banking channels in Indian Rupee drafts drawn in favor
of insurance company 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 resident bank accounts held in India in his own name
(either solely or jointly with another member of the family)
By cheque drawn on account maintained
by NRI's 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
insurance policies have been absolutely assigned to a person
residing 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
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.
Payment of claims
The payment of claims or surrender value in foreign currency is
possible only in the following circumstances:
the policy holder is permanently resident
outside India and
all the premiums under the policy have
been paid in foreign currency or by remittances from abroad
through approved channels.
Where the premiums have been paid partly in Indian currency and
partly in foreign exchange, the payment in foreign currency is
in proportion to the amount of premiums paid by remittance from
abroad to the total premiums paid.
A formal approval from the RBI is mandatory when the payment of
policy is made in foreign currency.
Maximum insurance cover for NRIs
All terms applicable to resident Indians for the purpose of sum
assured, apply to NRIs as well and there is no coverage limit.
For PIOs, the maximum cover is restricted to Rs 20 lakhs for all
policies taken together
Loans against Insurance Policy
NRIs enjoy the benefit of taking a loan against an insurance policy
in India. The rules governing payment of claims apply on disbursement
of loan as well.
Transfer of Policy Papers Overseas
Records of a rupee life insurance policy cannot be transferred
from an office in India to a branch office outside India without
the consent of the Reserve Bank. Such transfers are legitimate
only if transfer of actuarial reserves is not involved or the
policy-holder is eligible for a capital transfer from India.
Can a policy-holder take the policy document out of the country?
As per the foreign exchange regulations act, life insurance policies
are considered as securities, and export of these documents requires
the formal approval of the RBI, giving full particulars of the
policy, person to whom the policy is to be sent and reasons therefore.
Rules for assigning an NRI policy
Permission from the RBI is required for assignment of rupee policies
held in India by a resident of India in favor of any person resident
outside India, or by a NRI in favour of another NRI residing in
a different country. Prior approval is not required where the
assignment is without consideration in favor of the policy-holder's
non-resident wife or other dependent relatives.
Rupee policies may be freely assigned by non-residents in favour
of banks or LIC in India for obtaining loans provided the loan
amount is paid in rupees in India to the policy-holder or his
close relatives or by credit to the policy-holder's NRO account
with an authorised dealer in India.
Policy records transferred from one foreign country to
Transfer of records relating to rupee policies and foreign currency,
along with actuarial reserves, from a register in one country
to a register in another country can be made freely. If, however,
actuarial reserves are to be transferred from India, prior approval
of the Reserve Bank is necessary.
Insurance Policy for Persons of Indian Origin
PIOs can avail of insurance policies in India under the following
Unlike NRIs, PIOs cannot purchase an
insurance policy through mail.
The policies issued are in Indian Rupee
Currency only and are issued to the PIOs during their stay in
All proposals will be under the medical
Joint Life policies and plans having
term insurance element are not allowed.
The proponents will be required to fill
in a Non resident Questionnaire form.
The policies cannot be exported out of
The claim proceeds under such policies
will be paid in India in Indian Currency and will not be allowed
to be repatriated out of India.
The consent of the proponent is to be
obtained in advance as the above condition will be typed on
the policy bond.
The maximum Insurance Cover that can
be granted under such cases on individual life shall not be
in excess of Rs. 20 lakhs for all policies taken together.