As a Non-Resident Indian (NRI), living and working abroad has its financial challenges. One of the primary issues for the NRIs is the safety of their families in India. Although many options are available to invest and grow wealth, term insurance is one of the simplest and best options for NRIs to protect their families. Term insurance plans are a simple yet powerful tool for providing financial protection for loved ones in case of an untimely death.
What is Term Insurance?
Term insurance is a life insurance policy where the policyholder makes payments at fixed intervals for a definite period. If the policyholder outlives a term, no money is given out, and this is among the discriminating features of term insurance, dissimilar to other life insurance types such as endowment and whole life policies. The primary reason to get a term insurance policy is that it is cheaper and the possibility only covers the risk in case of untimely death. It is different from an investment or savings plan, which are the benefits included in life insurance policies. Therefore, this term insurance policy is the cheapest way to obtain a large life insurance coverage.
Why Term Insurance Plans Matter for NRIs?
Term insurance for NRIs in other words, gives the family of the expatriate the guaranteed future financial security that will not only come as a remedy in tragic times like the death of the main breadwinner but will also help to settle possible debts. Term insurance covers their special needs of living far from family in other countries. At the same time, this policy also helps the costs of loved ones who may be in India.
Here are some reasons why term insurance for NRI is crucial:
1. Budget-Friendly Personal Protection
For most NRIs, the key point of money management is making sure that their families living in India are assured of a good life. Life insurance comes in handy when you need it. Term insurance plans being cheaper than other types of insurance is the reason, affordability, that prompts you to opt for this particular type. So, you will still be able to take care of the future needs of your family in case anything happens to you without having to curb the rest of your household budget. NRIs are blissfully relieved on that account as they thereby are enabled to free funds for additional financial areas, simultaneously protecting a family from physical or financial disasters.
2. Bringing Financial Security over in India: The fundamental aim of NRIs choosing term insurance is thus to ensure their family members in India are well provided for financially. Imagine, without the monetary aid from this NRI who is the chief earner of the family, the family members who were used to such a lifestyle will find it nearly impossible to maintain the same standard of living. The other thing that you will get with the policy is the complete security and trust of your family because they will be assured that even if you are not around, they are still financially secure.
3. Tax Reliefs in Both India and Abroad: In addition to seeking out other advantages of a term insurance policy, NRIs have tax rebates to look forward to. As per the Indian tax regulations, premiums expended on a term insurance plan are subject to a maximum of Rs. 1,50,000 surpassed amount added to your gross income. Section 80C of the Income Tax Act will provide such tax savings.
Additionally, in several countries, mainly where NRIs dwell, tax incentives and relief schemes for life insurance are also available. In this case, the U.S., U.K., and Canada are some of the countries in which premiums for life insurance policies may be deductible according to local tax legislation.
4. No Physical Presence Required: One of the most striking features of term insurance for NRIs is that you don’t have to be physically present in India to buy or manage your insurance policy. Many Indian insurers facilitate such an option whereby the purchase and management of term insurance policies are done completely online, thus NRIs buy policies from the places they live in.
5. Global Coverage: NRIs claim that they have to go on business trips frequently for long periods or longer, and some even choose to reside in several different countries over the years. Make sure that the life insurance policy that you choose has to be international. Most Insurers, however, provide term insurance for NRIs that cover any place of living and travelling of an individual.
6. Flexibility in Payment and Coverage: Usually, term insurance plans for NRIs come with a variety of flexible options in terms of premium payment methods like annual, semi-annual, and monthly. This flexibility provides foreign nationals with the freedom to select the premium payment schedule that is most convenient for them.
7. Wealth Building through Return of Premium Plans: Indeed, traditional term insurance policies do not provide a return to the policyholder if the insured person survives the policy, although there are term insurance plans with a return of premium (ROP) option.
For NRIs, this option – though indirect – comes as an avenue of growing wealth. Even though the primary objective of term insurance is protection, the return of premium is also a bonus through the assurance that the premiums paid are not lost.
8. Peace of Mind: Living abroad often means that NRIs have to deal with emotional stress about their families back home. By purchasing a term insurance plan in India, NRIs get the assurance that their loved one’s financial future is safe and secure, which puts their minds at ease even if they are not physically present. Thus, this mental comfort enables NRIs to pay more attention to their work and other indispensable areas of life without being in a constant state of anxiety regarding their family’s future.
Top Term Insurance Plans for NRIs
NRIs have a variety of choices that they can choose from to decide on a term insurance plan that suits their needs. Among the top term insurance for NRI are:
HDFC Life Click 2 Protect Term Plan: This plan provides cover for death, terminal illness, and accidental death, with other benefits such as cover for permanent total disablement.
ICICI Prudential iProtect Smart: A detailed plan that offers protection against death, terminal illness, and accidental death, along with a provision for severe illness protection.
Max Life Online Term Plan: This term insurance plan has a wide range of coverage from low premiums and allows the policyholders to tailor-make their insurance coverage along with the additional riders.
SBI Life eShield: A simple, cost-effective, and easy-to-enroll online term insurance plan that provides comprehensive coverage at a reasonable price.
Such plans are specifically structured to target NRIs, which allows them to enjoy full global coverage and different convenient payment options.
Conclusion
Term insurance plans are a good illustration of how NRIs can secure their future by taking advantage of this cheap way of protecting their family that is living back in India. Term insurance is an attractive option for NRIs with affordable premiums, tax benefits, global coverage, and flexible payment methods which is a suitable and practical way to build wealth and offer protection.
Whether you go for the conventional term insurance policy or one with a return of premium trait, the benefits of the assurance it provides together with the values of the financial security it generates will be greater than the cost of the premium even to an NRI.