Indians who work overseas are known as non-resident Indians (NRIs). Even if NRIs reside abroad, they might favour purchasing financial items in India. One typical instance is purchasing term insurance in India.
Several NRIs chose to purchase term insurance in India following the Covid-19 pandemic to find some sort of financial stability. What motivates such a preference? In India, why do NRIs purchase term insurance? Let’s examine this.
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Causes for NRI term insurance purchases in India
To Take Advantage Of Low Premiums
Depending on where the person may be residing, term insurance premiums in India tend to be less expensive than those in other countries. Average international premiums are 20% more than those in India. This implies that NRIs must pay a greater premium outside of India for the same coverage as they would in India.
To Pay Off Debt
A term plan aids in debt repayment in the absence of NRIs who have taken out loans in India. Mortgage redemption plans, which are loan-related decreasing-term programmes, are an option open to NRIs. The term plan might assist in paying off the remaining loan sum in the event of an early passing away. By doing this, the family can be spared from having to deal with debt.
Due To The Straightforward Procedure
In India, purchasing a term plan is an easy process. NRIs can easily purchase the policy online. As an alternative, people could purchase the policy while travelling to India. In general, the fees for the medical tests performed outside of India may have to be incurred by the individual, depending on the terms and circumstances set forth by the insurer. They may be required to complete a telemedical or physical health screening while choosing the policy.
An online term insurance calculator also assists NRIs in determining the projected coverage needed to adequately protect their families’ finances.
Due To The Built-In Tax Advantages
Subject to meeting the criteria and circumstances outlined therein, NRIs are eligible for term insurance tax benefits on premiums paid under Section 80C and on the maturity amount as per Section 10(10D) of the Income Tax Act, 1961. As a result, NRIs who have taxable income in India might lessen their tax obligations while still getting insurance. As a result of these advantages, NRIs favour purchasing a term insurance plan in India. They may safeguard their family’s financial future in the event of their absence thanks to the plan, which offers the coverage they require at reasonable costs. **
Familiarity With The Indian Insurance Market
NRIs who have lived in India for a significant period of time may be more familiar with the insurance market and the various plans offered by Indian insurers. This familiarity may give them a greater sense of confidence and trust in the policies offered by Indian insurers, making them more likely to purchase term insurance in India even if they reside abroad.
Cultural And Familial Reasons
Many NRIs may have strong cultural and familial ties to India and may want to ensure that their families are financially protected in the event of their untimely passing away. Purchasing term insurance in India may be a way for NRIs to demonstrate their commitment to their families and their homeland.
Exchange Rate Fluctuations
Exchange rate fluctuations can impact the value of an NRI’s foreign currency earnings and savings. By purchasing term insurance in India, NRIs can lock in a fixed premium and coverage amount in Indian rupees, which may provide a measure of stability and protection against currency fluctuations.
A term insurance calculator is a tool you may use online to determine the amount of coverage required based on your needs.
Consider making an investment in a thorough term plan if you are an NRI. Calculate the appropriate level of coverage with the term insurance calculator. You can choose coverage to look after your family even if you aren’t there. In recent years, NRIs have increasingly turned to purchase term insurance in India as a way to protect their families and provide financial security in the event of their untimely passing away.
One key advantage of purchasing term insurance in India is the lower premiums offered by Indian insurers compared to those in other countries. Additionally, Indian insurers offer a wide range of policies to suit different needs and budgets, and online term insurance calculators make it easy for NRIs to determine the coverage they require.
Overall, term insurance in India offers NRIs a valuable financial tool to protect their families and provide peace of mind, even if they reside abroad. With its lower premiums, ease of purchase, debt repayment benefits, term insurance tax benefits, and protection against currency fluctuations, term insurance in India is a compelling option for NRIs seeking to safeguard their families financial future.