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3 Ways an NRI or PIO can Pay Premiums

dateKnowledge Centre Team dateDecember 08, 2020 views89 Views
Is a term insurance cover valid outside India?

Banks have smoothened their working cycle to give insurance protection to Indians residing outside India. Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs) are permitted to put resources into term plans. If you are an NRI or PIO, you can buy life insurance plans offered by Canara HSBC Oriental Bank of Commerce Life Insurance. Here are a few things to consider while buying a life insurance cover for NRI and PIO:

a) The Indian who lives in the other country under 182 days over the first monetary year can get the insurance cover.

b) The insurance holder should be an Indian resident, this will guarantee inclusion to the protected, in any event, when he ventures or remains abroad.

c) It is said that a person should buy or get the insurance cover in person at whatever point they are in India to deal with the procedural and endorsing customs of insurance cover.

d) If a person is unable to visit India, they can get insurance cover through Mail Order Business (Online). In the online process, the person must conform to a public accountant, Indian ambassador, or authority of the concerned Indian government office abroad.

e) Banks also provide travel insurance for people travelling abroad like emergency medical treatment and assistance, legal travel assistance, emergency financial help. A person needs to consult the bank before choosing any travel insurance plan.

How an NRI or PIO Pay the Premium for a Life Insurance Cover?

These three simple ways can help an NRI or PIO pay the insurance cover for the premium amount.

1. Amount settlement in foreign currency

The bank features that help in converting the country’s currency of the respective country where the person is living, working, or studying. To transfer the money the person is required to contact the bank’s customer care executive, or by emailing, or by simply visiting the bank if the bank has its branch in the foreign country. Ideally, an amount is transferred between 3-4 business days to the account of the receiver.

2. NRO account

Non-Resident Ordinary (NRO) Account is a path for NRI and PIO to pay the amount, profits, benefits, lease, etc to employees or family.

a) NRO account helps the person localize or move the premium amount to any bank account of the nominee. A person can move the principal sum inside the indicated limits. A person can move up to USD 1 million of every one financial year of the insurance cover.

b) The premium that a person acquires on an NRO Account is available at 30%, deductible at source.

c) On the off chance that person funds incorporate their pay acquired in India and need a record to oversee it inside India, an NRO Account is an ideal choice for such circumstances.

3. FCNR bank account

FCNR is the Foreign Currency Non-Resident Account. If a person is living abroad but wants to keep a Fixed Deposit Account in India, a person can pick an FCNR Account that permits them to set aside cash acquired abroad in Foreign Currency. The amount is converted into:

  • US Dollars
  • Pounds
  • Euro
  • Japanese Yen
  • Australian Dollars
  • Canadian Dollars

What you need to remember-

a) FCNR Accounts are Deposit Accounts and not a Savings Account.

b) A person can open an FCNR Account by moving cash from their current Non-Resident External (NRE) Account.

c) The premium that a person acquires on FCNR accounts is tax-exempt, and it is not available in India.

d) A person can benefit from an overdraft office over their FCNR Term Deposit Account.

Types of Insurance for NRI and PIO

1. Life Insurance

Every person requires life insurance for themselves, for their children or on whom any liabilities they have will degenerate in their nonattendance. If a person decides to get a term insurance cover living abroad, without visiting India, then they should ask specific questions from the bank:

a) Can the amount be paid in the home currency?

b) The claimed money would be paid in which format NRE/NRO or any other format?

c) What is the inquiry that the bank will do from the NRI or PIO?

d) Is the insurance cover renewed?

e) What are interest charged on the insurance cover?

f) At what period a person can withdraw the insurance amount?

2. Medical Insurance



3. Personal Insurance

Personal insurance acts as a protection strategy that a person gets if any mishap or inadvertent event has happened. A person should check or ask the bank for the personal insurance policy as not every bank offers it to NRI and PIO.

In personal insurance cover, clinical costs repayment and mishap remuneration is paid by the banks in India and the amount is payable only in Indian rupees.

4. Other Insurance Cover

Banks provide NRI and PIO with a single insurance plan package, and they pay a single amount payout to the account holder. As an NRI and PIO, a person must present certain required medical documents to their bank to get the single insurance cover package.

Five Things to Remember while Choosing Life Insurance Cover from Canara HSBC Oriental Bank of Commerce Life Insurance

a) NRI and PIO can open the bank account.

b) A person can open the joint bank account with minimum two and maximum of four individuals.

c) A person can open only a KDR account.

d) The foreign currency that is to be invested in NRE is converted into rupee balance in the depositor’s NRE account.

e) For customer convenience, the bank converts the amount to the currency of the respective country.

There are specific terms that a person needs to follow to avail the benefit of insurance cover from the bank:

1. A person is required to give the precise mandate to receive the maturity amount in Indian rupees only for the credit of their NRESB/NRE/NROSB account.

2. If the person wants the insurance cover fund,they will get it only after one year.

3. If the person wants to withdraw their insurance cover from the bank, they can deposit certain bank charges.

How to Choose the Right Life Insurance Cover?

1. For Family Protection

Everyone needs security to shield their family from confronting any monetary difficulty while at their job abroad. To choose the ideal insurance cover for the family a person need to consider certain factors like, the number of wards a person have, is there any marriage in the coming years, age of family members, a person should also consider their current pay, how much compensation a person will get in their long term resources and liabilities.

2. Cost

People should check the cost they have to give to the bank to get the appropriate insurance cover. They should check the asset board expenses, mortality charges, renewable insurance charges, if any, etc. Before settling on any decision, a person should ensure that they have perused the fine print of cost involved cautiously to get the insurance cover.

3. Claim Settlement

The principal reason behind getting the insurance cover is that the family or close ones do not have to suffer the discomfort while a person is not in the country. A person should be aware of claim settlement procedure before choosing any insurance coverage plan the claim settlement is calculated in rate terms. The higher the proportion of claim settlement is, the more benefits the person is going to get.

4. Cover

A person should choose term insurance that covers every need, including the medical emergency. The cover should provide security which gives inclusion to an unrestricted timeframe. Term insurance cover should have an adequate amount that a person needs in an emergency or any unavoidable circumstances.

5. Unit-Linked Insurance Plan (ULIP)

It accommodates life insurance coverage, where the arrangement appreciates whenever shifts per the necessary resource’s estimation. ULIPs are a great way to manage your investment portfolio. You will get a life cover with an investment avenue where you can boost your wealth creation and legacy building strategy.

Insurance cover for NRI and PIO is a great option to keep them and their family secured. Insurance cover acts as an emergency asset that can help a person to overcome any difficult situation. It is always best to plan before any future emergency. The insurance covers premium account cover relies on banks policy term and condition, instalment recurrence, or any feature chosen while getting the insurance, etc. A person can pay the premium amount through settlement in NRO/NRE account holders. NRI and PIO must provide some documents to get the insurance cover like proposition structure, age confirmation document, health or medical report, application charge identical to the primary premium payable, etc. To get the renewal person is required to go through clinical assessments to meet the reestablishment measures. Also, NRI and PIO should guarantee that they don't default on the charges or deferral the expenses while applying for the insurance cover.

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Frequently Asked Questions (FAQs) for Term Insurance

This being a term plan doesn't offer any payout after maturity or expiration date.

Each insurance company has its own term insurance premium calculator. If you want to check out the premium quote, go for the iSelect Star term plan calculator. It gives a premium amount based on your age, gender, habits, education, and annual income.

You can purchase an iSelect Star term plan anytime between 18 to 70 years of age.

It depends on your needs. For example, if you want to cover a child's education or wedding expenses, you have to include them in your coverage. Your premium will be calculated accordingly.

If your key purpose is to give your Family financial protection, go for the term insurance plan. And if you want some savings, in the end, go for a traditional life insurance plan.

Go for at least 12 times cover than your annual income. Or you can go as far as 20 times coverage as per your needs.

The right time is when you don't have anything to keep your Family safe from financial storms, and they rely on you for financial needs.

If you are unable to make the payment or suffering from a terminal illness, a term plan pays a part of the sum insured to treat your disease.

Term insurance riders are attachment or endorsements made, while taking the term insurance policy, as a supplementary coverage to policyholders. Apart from the core death benefit, term insurance riders offer below-given additional benefits:

  • Accidental Death Rider When a person suffers from a terminal illness, his/her family ends up spending a significant amount in treatment and medical expenses. Accelerated death rider pays a part of the sum insured in advance to cover such costs and save the family from running out of cash.
  • Accidental Disability Rider If the policyholder can't pay the premium because of an accident or permanent disability, a sudden disability this pays the premium on behalf of the policyholder till completion of policy term or for a defined duration.
  • Critical Illness Rider If the insured person gets a heart attack, cancer, or any other critical illness, this rider pays a lump sum on valid diagnosis.
  • Premium Waiver Rider If the policyholder is unable to make payments due to income loss or disability, a premium waiver rider waives off all future premium payments. And the term policy remains active until the expiration date.
  • Income Rider: The rider ensures that your family receives regular income + sum insured in case of unfortunate demise of life insured.

Anyone can go for life insurance as it offers some savings after the maturity date, but it doesn't cover the protection of your family . The best term insurance plan is solely designed for taking care of loved ones if something happens to you. Term plans act as a shield between your family and sudden financial fall. They make sure that your family lives a healthy life even after you. With a little amount paid per year, you can be worry-free from the family's financial conditions.

Questions that you need to ask while buying Term Insurance?

  1. 1. Amount of premium you have to pay based on your age, habits, education, and monthly income
  2. 2. The total number of benefits covered in the term plan. Do they include benefits that you care about the most?
  3. 3. How to save money on tax if you pay for the term plan?
  4. 4. Do they offer regular income options?
  5. 5. Can you change the coverage and premium in the future?
  6. 6. Does the claim consider valid if death occurs outside India?
  7. 7. Which kind of death is not covered by insurance?
  8. 8. Can NRIs take term insurance? If yes, what are the conditions?
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