5 Things Every NRI in Qatar Should Know Before Buying Life Insurance in India

Thankfully, Foreign Exchange Management Act, 1999 (FEMA) allows NRIs to buy life insurance plans in India. As an NRI from Qatar, you can explore a range of plans and choose those that match your financial needs.

With benefits like affordable premiums, optimal coverage, ease of buying, online premium payments, and tax savings, life insurance can prove to be a good addition to your financial plan.

However, buying life insurance in India should not be a rushed decision. You should take the time to understand the coverage available, its suitability and the process involved in buying the plan . . So, let’s understand the nitty-gritty for a hassle-free and informed purchase.

5 Important things to consider when buying life insurance in India

Given below are five important things to know when buying life insurance in India -

Tip 1: Choose the Right Plan

This is the most obvious thing to do when you set out to buy life insurance in India. There are multiple types of life insurance plans available, and you should choose a plan that aligns with your financial needs.

For instance, a term insurance plan can provide financial security to your loved ones in your absence. If you want to plan for retirement back home, annuity plans would be a better choice.

So, assess your financial needs and then find a plan that would fulfil them.

Tip 2: Don’t Skip Medical Disclosures

Life insurance plans are based on the principle of utmost good faith. The insurance company believes that you would provide true and correct information in the proposal form when buying the policy. This includes details about your medical history, too.

So, when buying insurance, declare all present and past medical conditions honestly in the proposal form. Based on your disclosure, the insurance company might request a pre-entrance health check-up before issuing the policy. You can get the check-ups done in Qatar and send the reports to the insurer in India. Alternatively, if you are buying the policy when visiting India, you can get the check-up done at any medical facility tied up with the insurance company.

In some cases, if any adverse medical condition or history is detected, the insurance company might raise the premium. It is better to pay a higher premium than face the risk of claim rejection due to non-disclosure or misrepresentation of your medical history.

Tip 3: Understand NRI Documentation

While NRIs can buy the life insurance plan online from the comfort of their homes or offices in Qatar, they would have to submit relevant documents to get the policy underwritten and issued. Some of the commonly required documents include the following –

• Proposal form, duly filled in and signed
• Identity proof
• Overseas address proof
• Income proof
• Copy of passport and Visa
• Medical reports, if applicable, etc.
• NRI questionnaire and Travel Questionnaire
• PIO/OCI Card is required where applicable
• Additional documents as needed by the insurer

Keep all your documents handy so that they can be submitted quickly.

Tip 4: Confirm Premium Payment Rules:

As an NRI sitting miles away, you need to understand the different premium payment mode rules for life insurance plans. Remember, life insurance policies are denominated in Indian Rupee (INR) and the premium is also required to be paid in INR.

To pay the premium, you can use your NRO (Non-Resident Ordinary) or NRE (Non-Resident External) account held with an Indian bank. Both the NRO and NRE accounts are denominated in INR and allow easy premium payments.

You can also make international wire transfers for paying the premiums. However, in such cases, your Qatari Riyal would be converted to INR, and exchange rate fluctuations can impact the amount needed.

So, choose the right premium payment mode so that you can pay the due premiums easily and timely and enjoy the full benefits of your policy.

Tip 5: Understand Claim Process:

Understanding the claim process of your life insurance policy is also important because that is when your policy would fulfil the purpose for which it was purchased.

In the case of death claims, the claim would be paid to your nominee. If you have appointed a nominee back home, ensure that you inform them of the same and explain the claim process. If the nominee lives with you in Qatar, inform them too. The nominee would have to inform the insurer of the death and make a claim by submitting the relevant documents.

In the case of maturity claims, you can handle the process and get the amount credited to your NRE or NRO account.

Conclusion

Buying life insurance in India is a wise move for the NRIs of Qatar. It not only helps you plan for uncertainties but also offers financial stability to your family in Qatar or back home. However, when buying life insurance, knowledge of the plans, their terms and conditions, and other aspects of the purchase process is important. This would help you manage the purchase across borders.

So, take some time, understand the key aspects of buying life insurance in India and then buy policies that suit your needs and goals.

FAQs

1. What tax benefits are available under life insurance plans?

   You can claim a deduction on the premium paid under Section 80C up to ₹1.5 lakhs⁵. The death benefit received is tax-free⁶ and the maturity benefit is also tax-free under Section 10(10D)⁵, subject to certain conditions.

   
   

2. If I pass away in Qatar, will my life insurance policy, bought from India, cover such a death?

   Yes, life insurance policies cover death globally. So, even if you buy the policy in India, the policy would cover death irrespective of the country you are in.

   
   

3. Which types of life insurance plans can I buy?

   As an NRI, you can buy every type of life insurance plan, like term insurance, endowment insurance, money back plans, child insurance plans, annuity plans, etc.