Term insurance refers to a life insurance policy that covers financial obligations for a specific period known as ‘term’. The typical range of term insurance is between 5 to 30 years which can be selected by the insured based on their financial situation and specific needs. The beneficiaries designated by the insured are eligible for the benefits of the policy after the death of the policyholder. The premium plans in term insurance policies are comparatively low and it is an affordable as well as a simple type of life insurance for a limited duration. There are different types of term insurance available for Indians as well as NRIs that provide financial security for their loved ones.
Features of Term Insurance for NRI–
Term insurance for NRI is an insurance plan available for non-residents of India (NRIs). Term insurance for NRI includes several benefits however it has different eligibility criteria and documentation needs in comparison to the basic term insurance plan. The key features of term insurance for NRI are as follows-
Eligibility: Several insurance companies provide term insurance plans for NRI with specific eligibility criteria. Before buying term insurance for the NRI plan, NRIs need to fulfil certain conditions including holding a valid visa, Residency status, Residency permit country of residence, etc. Additionally, the minimum age of NRI should be at least 18 years old and not more than 60-65 years (subjective).
Documentation: The term insurance for NRI requires additional documentation while applying for the plan such as proof of residency such as a Passport and Visa photocopy proof of address of NRI living in a residential country, proof of income and proof of age.
Premium Payment: the premium payment processor of term insurance for NRI requires a strong approach to payments. NRIs must have different options to make the payment of premiums such as International Bank transfers or payment in foreign currency. NRIs also get flexibility from insurance providers to pay premiums based on policy policyholder’s choice.
Coverage: The coverage of term insurance for NRI is similar to basic term insurance plans. NRIs are allowed to select a coverage amount as well as term length suitable to their needs and financial obligations. The coverage options are similar for NRIs to the residents of India holding term insurance.
Medical Underwriting: NRIs need to undergo for a medical examination to clarify and disclose information about their medical history health conditions and Lifestyle as an important aspect of the underwriting process. Based on the medical underwriting the premium amount is decided to focus on age Lifestyle coverage amount and health status of the policyholder.
Policy Issuance: the process of approving term insurance for NRI is longer compared to basic policies for residences because issuing term insurance policies among NRI includes additional documents and verification procedures.
Claim Settlement: insurance companies need to provide clear information and understanding regarding the claim settlements among NRIs. The claim settlement of term insurance for NRI requires specific documentation and procedures and it is important to disclose of any important information among them.
Benefits of Term Insurance for NRI–
Financial Protection: term insurance for NRI provides financial security among policyholders to ensure the financial stability of beneficiaries in the event of death or terminal illness. Term insurance is helpful for NRI to cover obligated expenses like debt and mortgages to eliminate any kind of financial stress over loved ones after the death of the insured.
Affordability: term insurance is an affordable type of life insurance that offers good coverage amounts with relatively fewer premiums compared to usual life insurance policies like universal life policies and whole life. Term insurance is helpful for NRI to balance their financial obligations in their home country while earning and residing in a foreign country.
Flexibility: A term insurance policy is a flexible approach for NRIs which provides effective coverage amounts in a Limited term length. The NRIs can select duration as the laser level of coverage in a term insurance plan best suitable to their financial goals and obligations.
Currency Option: Term insurance for NRI includes the exclusive feature of premium payments and death benefit payouts in different currencies. The option of different currencies helps NRI to earn as well as hold assets and manage fluctuations and risks in multiple currencies.
How an NRI can get a Term Insurance–
- The first step of purchasing term insurance for NRI requires proper research and comparison between the policies provided by different insurance companies to select a reputed and trustable Company.
- After selecting an insurance provider, an NRI needs to gather all the important documents such as identity proof, income proof address proof, etc.
- Now the individual needs to complete the application process which includes feeling the application form online or offline mode.
- After completing the application process the insurance company will need a medical examination of the individual to ensure the health status to approve term insurance.
- The next step is underwriting and approval of your term insurance for NRI which will include the coverage details and premium details.
- As soon as a payment of the premium is made by the policyholder, the policy issuance process starts. Later, the policyholder needs to review and update the term insurance policy based on their financial goals and needs.
Considerations before buying Term Insurance for NRI Plan–
- It is important to analyse and ensure the reputation of the insurance provider.
- The coverage in options and premiums are important to consider to analyse policy affordability.
- Before taking term insurance for NRI the underwriting process is important to consider to get accurate information.
- It is important to properly analyse and understand policy terms and conditions.
- NRI should consider currency and payment options before buying Term Insurance.
- The tax implications and flaming settlement records are important to take into consideration.
- The customer services and support services need to be analysed to get further assistance after taking the policy.
- Along with legal and regulatory compliance a policy provider should be properly disclosed to maintain legality and security of your amount.
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