What Happens to Term Insurance If You Move Abroad as an NRI?

2025-05-05

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Moving to a different location, especially abroad, is full of emotional turmoil. Whether it is because of work, an opportunity to start a new life with family or study, it brings a lot of excitement, nervousness and paperwork. In the middle of all the planning and packing, one important question may pop up: What happens to your term insurance plan once you relocate?

So, once you become an NRI, the financial adjustments you may encounter are what we are going to discuss in this blog.

Key Takeaways

Your existing term plan continues to be valid even after you become an NRI.
Informing your insurer about your relocation is crucial to avoid claim hassles.
Premiums can often still be paid in Indian rupees through NRE/NRO accounts.
Use a term insurance calculator to assess whether a top-up is needed post-move.
NRIs also get a chance to claim 80C tax benefits; death payouts are usually tax-free under Section 10(10D).

Does Your Term Plan Stay Valid After You Move Abroad?

The short answer is yes, your term plan continues to be effective even after you migrate abroad. Because the policy was bought when you were an Indian resident, the terms and coverage remain the same, regardless of where you shift. Your policy will remain unchanged, and your nominee will continue to be able to claim if the worst occurs.

But do make note that a couple of things you have to watch out for when making the change. From checking your current method of payment to comprehending how the law in the region could possibly affect your coverage, a few processes are involved to ensure that things continue working the way they are. Foreign moves don't mean abandoning protection, but careful preparation can go a long way to ensuring that your term cover remains to deliver that sense of reassurance.

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What You Must Do After Moving Abroad?

After relocating, ensure your premium payment methods are updated, check if your insurer requires additional documentation, and confirm your current contact details. These simple steps help keep your term plan active and valid.

1. Inform Your Insurance Provider

First and foremost, let your insurer know about the change of domicile. Update the address, current country of domicile, and your contact information. This maintains correspondence in the open and transparent sense, particularly critical in case any claim is being raised in the future.

2. Check for Geographic Coverage and Exclusions

Certain term insurance plans contain conditions regarding high-risk nations or nations with politically or security-wise volatile situations. It's a good idea to go through your policy document or consult an advisor to check if your destination nation is included under your current plan.

This is where a term insurance plan calculator becomes useful. It enables you to reassess your requirements according to your new life situation and location and get the best term insurance plan.

3. Premium Payment Options for NRIs

As an NRI, there are various easy ways to continue paying your premiums overseas. Whether you earn your income in India or abroad, there are payment options to suit your requirements.

Some of the most popular methods for NRIs to pay term insurance premiums are:

Payment Method	Details
NRO Account	If income is sourced in India (Non-Resident Ordinary)
NRE Account	If remitting money from abroad (Non-Resident External)
International Debit/Credit Cards	Accepted by many insurers
Netbanking/UPI	Through Indian accounts or remittance

To prevent any delay in payments or due dates being missed, ensure your bank details with your insurer remain updated at all times. You may also take advantage of auto-debit facilities, ensuring your premiums are paid automatically on time, helping you relax and stay covered, no matter where you are globally.

4. Tax Implications

If you are an NRI with taxable income in India, e.g., from rent, interest, or investments, you can claim deductions u/s 80C on premiums paid towards a term insurance plan. It's a useful method of reducing your taxable income while ensuring the future of your family.

Also, if there is any bad luck, the death benefit received by your nominee under your term plan is normally tax-free under Section 10(10D). And, obviously, this has a few strings attached, such as the premium cap not being higher than a pre-decided proportion of the sum assured. Thus, while overseas, even your term insurance can keep on providing both financial security and tax advantages back home in India.

Did You Know?

Life insurance demand among NRIs has jumped 50% in two years, as more seek to protect their family's future overseas.

Source: BT

Are NRIs Eligible to Purchase a Term Insurance Plan in India?

Yes, definitely. Even as an NRI, you can purchase a new term insurance policy from India. The process is quite the same, but sometimes you will have to fill piles of paperwork or undergo a medical test, particularly if you're based in a nation categorised under higher-risk regions.

Should You Buy a New Term Plan as an NRI?

If you are relocating permanently or long-term, it might be time to reassess your current cover. Life overseas brings new costs, greater living expenses, international education for kids, and overseas mortgages.

Here's where a term insurance plan calculator comes in handy once again. It helps you calculate the best sum assured that suits your income, age, debts, and family requirements.

Advantages of Purchasing from India as an NRI:

Lower premium costs than on the world market
INR coverage that is advantageous for your family who lives in India
Simple online buying and service from anywhere in the world

iSelect Smart360 Term Plan by Canara HSBC Life Insurance is ideal for NRIs with global coverage, payment flexibility, selectable payouts, and tax advantages under Section 80C, with a cover of up to ₹1 crore.

What Happens to Nominee Claims if You Pass Away While Abroad?

In case a tragic incident happens while you are overseas, your nominee can still make a claim. They must provide:

Death certificate (ideally in English or translated)
Evidence of your foreign residency status
Valid address and identity proof
Filled-in claim form

Revisiting the Best Term Insurance Plan for NRIs

Being an NRI, selecting the best term insurance plan is all the more important for you, as you require a policy that provides ease, convenience, and international protection. Let's see some of the salient features that a suitable term insurance plan should offer you as an NRI:

Feature	Why It Matters
Global Coverage	Ensures peace of mind, no matter where you reside
Multiple Premium Payment Options	Convenience while managing international finances
High Claim Settlement Ratio	Reflects reliability and trust
Online Service Access	Helps manage your policy from anywhere
Option to Add Riders	For critical illness or accidental death coverage

With these special features in place, your term insurance plan will continue to protect your family's future, regardless of where you are.

Using a Term Insurance Plan Calculator: Why It’s Smart

Going abroad brings about numerous changes in the financial part of your life. A term insurance plan calculator is an effortless utility that assists you in reevaluating your insurance needs within minutes.

It takes into account getting the best term insurance plan for yourself:

Your new income level
Any foreign liabilities
Dependent family members in India or abroad
Future goals like education, healthcare, or repatriation

This tool is especially helpful when deciding whether to top up your existing plan or buy a new one altogether.

Calculate Term Insurance Premium

A term insurance calculator is a useful online tool that helps you determine how much coverage you need based on your income, lifestyle, and family’s needs.

My Income

My current Cover

Additional Details

Our Recommendation

My Income

My current Cover

Additional Details

Our Recommendation

I am {age} years old,

My Monthly income is {amount}

Additionally, I hold existing Insurance Cover of Rs {insurenceamount}

and loan amounting to Rs{amount}

My name is {name}

my mobile number is {contact}

50 Lakh

12.5 Lakh

75 Lakh

Zero

1 Crore

Where do you stand

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To secure your family’s financial future and protect their dreams, you’ll need an additional cover of

rs 10,000

Note: This is a very brief calculation of HLV

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Desclaimer-

The above calculation and illustration of figures are indicative only and not on actual basis.

Conclusion

Moving abroad as an NRI does not imply that your term plan is no longer valid. With proper payment options and policy handling, your term insurance still covers you and your family, regardless of where you reside.

Your term insurance can comfortably accompany you, providing the comfort of continuous protection as you settle into new environments. Even as you relocate to a foreign land, your family's financial cushion remains intact, leaving you secure across borders.

Glossary

NRO/NRE Account: Bank accounts for NRIs to manage income earned in India (NRO) or overseas (NRE).
Section 10(10D): It offers tax-free life insurance payouts, provided the policy meets specific premium and eligibility rules.
Claim Settlement Ratio (CSR): Ratio of claims settled by an insurer out of the total received during a financial year.
Rider: Add-on to your standard insurance policy for additional coverage (e.g., critical illness).
Term Insurance Plan Calculator: It assists you in estimating optimal insurance coverage based on your income and liabilities.

FAQs

Your term insurance policy will be valid even after you become an NRI, provided you pay the premiums and the conditions of the policy remain the same.

NRIs can pay premium using NRE/NRO account, international debit/credit card, and net banking from an Indian account.

Yes. If you've bought the policy prior to shifting abroad, your coverage extends all over the world unless otherwise mentioned in the policy conditions.

No, provided all policy conditions are fulfilled and documents are filed, your nominee will be able to claim the sum assured even if death is suffered outside the country.

Yes, the majority of Indian term insurance policies, including Canara HSBC Life Insurance, cover death abroad if all documents are submitted.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.