Choosing the right child insurance plan is a big step for any NRI parent. It helps you prepare financially for your child’s education, health, and future dreams. With many plans available in the market, it is important to take your time and compare them carefully. Don’t rush into buying the first policy you see. Instead, think about your goals, income, and how long you plan to stay abroad. Look at what each plan offers in terms of savings, protection, and flexibility. Here are some important factors to check before you choose:
Coverage and Benefits
Check the plan’s features carefully. Look for payouts during key milestones like school or college years, life insurance coverage for the parent, a premium waiver in case of death and whether the maturity amount will be enough to meet future expenses. A good plan will offer both protection and enough funds for your child’s important life goals.
Flexibility
Flexibility is key when you are living abroad. Choose a plan that lets you pay premiums monthly, quarterly, half-yearly, yearly or single lump sum payment Also, check if you can opt for increasing or decreasing term plans, switch funds (in plans like ULIPs), pay top-up premiums for ULIPs, etc.. This helps you stay prepared if your income or life situation changes.
Returns on Investment
If you are looking for long-term savings, ULIPs or money-back plans are good options. These offer a mix of life insurance with market-linked returns. For lower risk, you can go for endowment or guaranteed* return plans.
Claim Settlement Ratio
This is the percentage of claims that the insurance company has settled out of the total claims received in the past year. A high claim settlement ratio means the insurer is trustworthy and will likely process your claim smoothly. This is especially important for NRIs who may not be present in India during claim time.
Tax Implications
Most child insurance plans offer tax benefits under Section 80C of the Income Tax Act. You can claim deductions on the premium paid. Also, the payout or maturity amount is tax-free under Section 10(10D), subject to conditions. This helps you save money while securing your child’s future.
Steps to Apply for Child Insurance as an NRI
First, compare different child insurance plans available for NRIs. Once you find the right one:
- Check the eligibility criteria
- Prepare the documents
- Contact the insurer online or through an agent
- Fill out the proposal form and submit your documents
- Once the proposal is accepted by the insurer, you will receive a confirmation and you can pay the premium thereafter using your preferred payment method.
- You’ll then receive the policy documents from the insurer.
Required Documentation
To apply, you will need:
- A recent photograph
- A valid copy of your passport, PAN card/Form 60 or Aadhaar
- Child’s birth certificate
- Address and income proof of Proposer / Policy Holder
- Cancelled cheque for maturity payout Some insurers may also ask for health records/ Medicals if required.
- Minor Life Questionnaire
- School Going Proof
- Immunization Records
- PIO/OCI Card is required where applicable
- Completely filled up FATCA form with TIN, address
- Travel questionnaire
- NRI Questionnaire
- Residence questionnaire
Premium Payment Options and Currency Considerations
NRIs can pay premiums monthly, quarterly, half-yearly, annually or one-time. Most insurers accept payments via credit/debit cards, NRE/NRO accounts, or net banking. If paying in foreign currency, exchange rates may apply. Choose INR-based plans to avoid currency fluctuations.
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