Is Indian Life Insurance Still Relevant for NRIs in the UK?

When to Consider Indian Life Insurance Policies?

NRIs may find Indian life insurance policies beneficial for the following reasons:

 

1. When there are liabilities back home

   If there are financial liabilities or debts in India, including education, family responsibility, and loans, you need to make sure that your dependents are protected.

   
   

2. When you find that Indian life insurance policies are more cost-efficient

   Life insurance premiums in India are typically much lower than comparable UK plans, offering a high cover at a fraction of the cost.²

   
   

3. When Indian policies offer flexible medical options

   Many Indian insurers offer tele or video‑based medical underwriting, eliminating the need to return to India for health checks. With this, buying life insurance in India becomes very convenient and easy, without you having to be physically present here.

   
   

4. When Indian products offer more variety

   Life insurance policies offer you the freedom to enhance the coverage. Riders such as accidental death benefits rider, critical illness rider, and term riders are widely available and can be aligned to your needs as NRIs. Keep in mind that riders can be country-specific, as they are provided by domestic insurers in accordance with local laws, regulations, and risk profiles.

   
   

GBP to INR Premium Advantage

The British Pound is stronger than the Indian Rupee in terms of value and global acceptance. It offers greater purchasing power and stability. For NRIs, earning in Pounds and spending or investing in Rupees can be highly beneficial.

Here’s how:

 

1. Low Rupee Premiums

   Indian term plans cost far less in absolute rupee terms than UK plans. Even when converting GBP to INR, the savings are substantial. For instance, a ₹1 crore term plan in India can cost anywhere from ₹5,000 to ₹10,000 annually.² When converted to GBP, it comes out to anywhere between 42.80 to 85.96 Pounds.

   
   

2. Favourable Exchange Rates

   When you are earning in GBP and remitting to India through your Non-Resident External (NRE) Account, you may be eligible for competitive forex rates. Your life insurance premium is locked in, so even if the rupee devalues, it translates to manageable and possibly lower GBP spend.

   
   

3. GST Waiver

   NRIs paying premiums from NRE accounts online may get an waiver subject to eligibility criteria and submission of required documents every year. ⁵ Depending on the insurance company and the policy that you choose, you may be eligible for online discounts, further reducing net cost.

   
   

Seamless Coverage for Family in India

One of the strongest reasons NRIs choose Indian life insurance is the simplified and convenient way that you can ensure family protection in India. Here’s how:

 

1. Nominee Flexibility

   In most cases, life insurance policies in India will allow you to choose a policy nominee of your choice. You can choose spouse, children, or parents, who may reside in India or elsewhere. In case of your passing away, the policy payout will be processed in INR directly to nominees, simplifying financial planning.

   
   

2. Claim Settlement Efficiency

   In India, the claim settlement would be handled by the insurer’s office in India. This way, the nominee or the claimants can avoid cross-border coordination delays that may possibly occur when a claim is to be raised with UK insurers.

   
   

3. Tax Benefits for the Nominee

   Life insurance can provide tax-saving advantages to the life insured. Under Section 80C of the Income Tax Act, you can claim up to 1.5 lakhs against the premiums that you pay. Apart from this, Section 10(10D) allows tax benefits on the maturity benefit if you are eligible. But that’s not all. Life insurance can offer tax-free death benefits as well.
   As the death benefit is paid in INR, Indian nominees are exempt from foreign exchange conversion difficulties.

   
   

NRIs in UK Need to Know: FCA vs IRDAI Regulations

As an NRI, when you plan to buy life insurance from India, it is imperative that you understand the regulatory frameworks in both countries. In India, life insurance companies operate under the Insurance Regulatory and Development Authority of India (IRDAI). NRIs are allowed to purchase Indian policies, subject to documentation and procedural norms under Foreign Exchange Management Act (FEMA) and IRDAI rules.

Indian policies are not regulated by the UK’s Financial Conduct Authority. Hence, purchases are not covered by UK consumer protection schemes. UK‑based NRIs considering Indian policies should review policy wording, grievance redressal mechanisms, and ensure compliance with Indian regulations.

 

Over To You

While buying a life insurance policy in India, choosing between a UK‑based and an Indian policy should be a well-informed decision. You should make the decision based on your residence status, income, family location etc.. Consider the pros and cons before finalising a cross‑border insurance plan.

 

FAQs

1. Can NRIs in the United Kingdom buy life insurance in India?

   Yes, NRIs who live in a foreign country are allowed to purchase life insurance policies from Indian insurance companies.

2. Do NRIs have to pay a higher premium?

   No, in most cases, life insurance premiums for NRIs are quite similar to premiums charged to resident Indians.¹However, if you are residing in a country considered high risk (due to political instability, war and health risks, etc) the premiums for NRIs might be higher.

3. Is a medical check-up mandatory to buy life insurance in India?

   The need for medical screening can depend on several factors, such as the insurance seeker’s age, medical history, and coverage.