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| Home > Individuals > NRI Center |
| How can a NRI obtain an insurance policy? |
FAQ's |
Who is a NRI?
Persons of Indian nationality or origin and who resident out side India are non-resident Indians and various categories of NRIs are as follows:
Indian citizens who stay abroad for employment or for carrying on business or vocation or for any other purpose in the circumstances indicating a definite intention to stay outside India for an indefinite period,
Indian citizens working abroad on assignment with Foreign Government or International Agencies,
Officials of Central and State Government and Public Sector undertakings deputed abroad on temporary assignments or posted to their offices abroad,
Indians who have settled abroad permanently or gone abroad on immigration.
Non-resident Indians become residents of India when they return to India for employment or for carrying on any business or vocation or for any other purpose indicating a definite intention to stay in India for an indefinite period. However, during their short visits to India for holidays or business, non-residents are not to be regarded as persons ordinarily resident in India.
Can insurance policies be issued to NRI? If so what insurances can be availed by an NRI?
All individual schemes offered by insurance companies can be availed by NRIs however foreign nationals of Indian origin will not be able to get certain joint life plans and plans having term insurance element.
Can NRIs take policies in Indian currency?
Yes, NRI can take policy in Indian rupees.
How can a NRI remit premium to the insurance companies?
The manner of payment of premiums under the policy is as follows.
By direct remittance from abroad through Banking Channels in approved manner (preferably by Indian Rupee drafts drawn in favor of insurer) or by remittances through postal channels like Foreign Money Order.
By payment out of funds held in Non-Resident (External) Account or Foreign Currency (Non- Resident) Account with a Bank in India.
By Cheques drawn by Non-resident policy holder on Bank Accounts held in India in his own name (either solely or jointly with another member of the family) whether or not the account has been designated as non-resident.
By cheque drawn on account maintained by resident parent or spouse of policy holder in their own name or joint names with other close relatives.
By the absolute Assignee in India wherever such policies have been absolutely assigned to a resident in India.
By the employers in respect of policies issued to their employees who have been deputed abroad by them.
Premiums can be paid in cash by a resident parent or spouse of the non-resident policyholder subject to his / her submitting a letter stating the relationship with the policyholder.
Premiums due on policies issued to Indian students who have gone abroad for higher studies may be collected in Rupees out of the Resident Bank Account in India or any of their representatives in India by cash or cheques.
Will the claims of a NRI policy be paid in foreign currency?
The basic rule is that the payment of claims or surrender value in foreign currency will be permitted when
the claimant is permanently resident outside India and
all the premiums under the policy have been paid in foreign currency or by remittances from abroad through approved channels.
Where the premiums have been paid partly in Indian rupees and partly in foreign currency, the payment in foreign currency is in proportion to the amount of premiums paid by remittance from abroad to the total premiums paid.
The payment of policy moneys in foreign currency can be made on getting approval from Reserve Bank of India.
Can persons of Indian origin take an insurance policy
Persons of Indian origin (PIO) are people who are of Indian origin and have acquired foreign nationality and policies can be issued to these people subject to the following conditions:
Unlike the case of NRIs, PIOs cannot purchase the policy through mail.
The policies issued are in Indian Rupee Currency only and are issued to the person of Indian Origin, who has acquired foreign nationality, during their stay in India.
All proposals will be under medical scheme.
Joint Life policies and plans having term insurance element are not allowed.
The proponents will be required to fill in a Non resident Questionnaire form.
The policies cannot be exported out of India.
The claim proceeds under such policies will be paid in India in Indian Currency and will not be allowed to be repatriated out of India.
The consent of the proponent is to be obtained in advance as the above condition will be typed on the policy bond.
The maximum Insurance Cover that can be granted under such cases on individual life shall not exceed an amount of Rs. 20 lakhs for all policies taken together.
Can a person residing in India hold a foreign-currency policy?
A permanent resident of India cannot hold a foreign currency policy. However, a person resident in India but not permanently resident may continue to hold any insurance policy issued to him by an insurer outside India, if the premium on such policy is paid out of foreign currency resources outside India.
What is the maximum insurance cover allowed to NRIs?
For the purpose of sum assured, an NRI he is no different from any other resident Indian and there is no coverage limit. However, in case of foreign nationals of Indian origin, the cover is restricted to Rs 20 lakh for all policies taken together
Are loans permitted to NRIs on policies held by them?
Yes, loans are permitted. The rules governing settlement of claims apply on payment of loan as well.
Can the records of a rupee policy be transferred out of India?
Records of a rupee life insurance policy cannot be transferred from an office in India to an office outside India without prior approval of the Reserve Bank. Such transfers are authorised only if transfer of actuarial reserves is not involved or the policy-holder is eligible for a capital transfer from India.
Can a policy-holder take the policy document out of the country?
As per the foreign exchange regulations act, life insurance policies are considered as securities, and export of these documents requires the permission of Reserve Bank of India. An export of policy documents without permission tantamounts to violation of exchange regulations. To export a policy document, an application is to be submitted to reserve bank of India giving full particulars of the policy, person to whom the policy is to be sent and reasons therefore.
Can a policy-holder assign his policy?
Prior approval of the Reserve Bank of India is required for assignment of rupee policies held on Indian Register by a resident of India in favour of any person resident outside India, or by a non-resident in favour of another non-resident in a different country, except where the assignment is without consideration in favour of the policy-holder's non-resident wife or other dependent relatives.
Rupee policies may be freely assigned by non-residents in favour of banks or LIC in India for obtaining loans, provided the loan amount is paid in rupees in India to the policy-holder or his close relatives or by credit to the policy-holder's Ordinary Non-resident Account with an authorised dealer in India not being a Non-resident External Account or Foreign currency Non-resident (FCNR) Account.
Can policy records be transferred from one foreign country to another?
Transfer of records relating to foreign currency, as well as rupee policies, along with actuarial reserves, from a register in one country to a register in another country can be made freely. If, however, actuarial reserves are to be transferred from India, prior approval of the Reserve Bank is required.
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