Nowadays, with illnesses and ailments at their peak, accidents happening all around us, and the economy suffering bigger-than-usual dips in the market, it is paramount to protect your financial interests. You need to focus on making more money and securing the future of those you love.
No matter where you live, if you have a job or a business, evolving insurance solutions offer better means to safeguard your family’s wellbeing and ambitions.
What is NRI term insurance in India?
A term insurance policy is a form of life insurance available at affordable premium rates with a high sum assured and flexible tenure. Normally, these term plans are offered for the betterment of Indian families and the peace of mind of Indian citizens. However, as the economic challenges evolved and Indians adapted to new ways of earning, insurance companies also branched out to accommodate people’s needs.
An NRI term insurance plan is designed to provide financial security to the families of Non-Resident Indians. These term plans are available to NRIs who are Indian citizens but work or live abroad.
If you are an NRI but have family in India, you can purchase NRI term insurance plans to secure your financial future. You can apply for the policy with Indian insurance providers and nominate your family in India as beneficiaries. You will need to select an adequate sum assured and the policy tenure.
In the event of your death, while studying, living or working abroad during the policy tenure, your beneficiaries can file NRI term insurance claims. You can rest assured that they will receive the sum assured as a death benefit, which will help you rest in peace.
Types of NRI term insurance?
Term insurance plans in India are available in many forms. If you hold Indian citizenship, then you are entitled to NRI term insurance that constitutes the following types of policies:
- Increasing term insurance –
With these NRI term insurance policies, the sum assured increases every year. Therefore, the amount that your loved ones receive in the event of your demise during the policy tenure is much higher than you planned. - Decreasing term insurance –
These NRI term insurance policies decrease the sum assured every year. The insurance companies help you repay Indian lenders included in the plan with the difference in sum assured. The death benefit payout may be lower, but the policy removes the burden of liabilities to a great extent. Therefore, your family has fewer outstanding debts and can use the remaining sum assured for their personal obligations and ambitions with ease. - Level term insurance –
These policies are steadfast with the terms and conditions. Everything you specify in the initial contract will be valid till your demise or the policy maturity, whichever comes first. - Term insurance with return of premium –
Typically, term insurance plans do not offer maturity benefits. However, if you purchase a return of premium, then upon surviving the policy tenure, you will receive all the premiums that you invested in the NRI term insurance plan.
These term insurance plans offer varying benefits, so you can select the one that best suits your needs and your family’s financial requirements.
How do you select the right plan and coverage?
Choosing the right type of NRI term insurance from the available options is important. You need to evaluate the circumstances of your family when making the decision.
For instance, if you purchase a 50 lakh term insurance policy for 10 years, you first need to consider if the 50 lakh sum assured will be sufficient for your family’s needs. You also need to consider the value of the 50 lakh term insurance payout after 5-10 years. Due to the inflation rate, would the amount be of similar value?
An increasing 50 lakh term insurance would increase in value annually, thus making the sum assured enough to beat inflation. A decreasing 50 lakh term insurance would bring in a smaller death benefit, but any loans you have in India will be majorly paid off, so your family will have fewer liabilities.
A level 50 lakh term insurance assures that no matter the year, the inflation, or any extenuating circumstances, your family will receive the death benefit as specified by you. Conversely, term insurance with a return of premium will serve as an excellent savings plan. The premium for 50 lakh term insurance will accumulate through the years and if you survive the policy tenure, your beneficiaries will receive a lump sum amount.
Now, assuming that you choose a higher coverage than a 50 lakh term insurance plan, your premium will be higher, but so will the savings if you have NRI Term insurance with a return of premium. Similarly, the death benefit for increasing term insurance will grow considerably. In any case, you can have peace of mind knowing that your family in India has sufficient funds to handle all their financial liabilities and ambitions.
