Rupee Leverage: INR Premium from USD Income
Life insurance plans in India become a cost-effective option for NRIs in the US as they get to benefit from rupee leveraging. While NRIs continue to earn in USD, purchasing life insurance in India appears as a smart move as it offers higher coverage at an affordable premium. The strong exchange rate between USD and INR is a pulling factor that makes premiums under Indian life insurance more economical.
Did You Know that the number of NRIs purchasing insurance plans in India has surged by more than 50% in recent years? This is primarily because of affordable premiums and higher coverage.
Claim Settlement Process
Life insurance plans in India offer a seamless claim settlement process for NRIs in the US. Nominees in India can simply raise a claim by informing the insurance company , submitting the documents required by the Insurer , and upon verification, the insurance company settles the claim.
The claim process is simple, and the claim amount is paid in INR. This eliminates the need for currency conversion, and the nominee can use this corpus easily.
Did You Know that for NRIs , claim settlement for life insurance policies in India is possible without having to visit India?
Coverage for India-Based Nominees
NRIs in the US turn towards life insurance plans in India as they have dependents in India. Building coverage for India-based nominees becomes easier with affordable premiums.
NRIs can buy term insurance plans in India and create a financial safety net for their family based in India. They can name such family members as nominees so that they can get death claim for their financial needs if the NRI passes away during the policy term.
Goal-Based Planning
The Life Insurance space in India has evolved over the years to offer options for goal-based planning. Whether an NRI wants to build pure life cover or coverage for specific needs like a child’s marriage and education expenses, or generate a steady flow of income, there is a plan available to cater to every need. For instance, child insurance plans help secure the financial future of your children whether in India or the US. Similarly, annuity plans help in creating a retirement corpus for your golden years.
Tax benefits on life insurance in India
NRIs in the US might also benefit from tax exemptions and deductions under the Income Tax Act, 1961. For instance, death benefits received under life insurance plans are exempted from tax. Similarly, the premium paid towards life insurance qualifies as a deduction under Section 80C. If you choose savings-oriented life insurance plans, you can enjoy tax-exempt maturity benefits too under Section 10(10D) of the Income Tax Act.
Did You Know NRIs can claim a GST deduction (Subject to eligibility criteria and submission of required documents every year) for premiums paid against life insurance plans using their NRE account?2
Life Insurance Plans for NRI
Different types of life insurance plans available are:
Term Insurance Plans
A term insurance is primarily a protection-oriented plan designed to cover the risk of premature death of the life assured . The plan offers death benefit to the nominee in case of the life assured’s demise during the policy tenure.
Endowment Plans
An endowment plan offers the combined benefit of life insurance and savings. Under this type of plan, the insurer offers death benefit in case of the life assured’s death during the policy term. If the life assured survives the policy tenure, the insurer pays specified maturity benefit.
Money Back Plans
A money-back plan is a type of endowment plan that, in addition to offering death benefit, also provides liquidity through regular payouts during the policy tenure.
Child Insurance Plans
Child insurance plans are available for NRIs in the US with dependent children. These plans help build a corpus for the child’s future. Most of the child plan comes with the premium waiver benefit, even if the parent passes away, the policy continues, and future premiums are waived off. This helps in securing the child’s financial future in the absence of the parent.
Annuity Plans
NRIs in the US planning for retirement can opt for annuity plans as these are retirement-oriented life insurance plans that provide guaranteed*, regular income, often for life, by converting a lump sum into periodic payouts ensuring financial security during your golden years.
To Conclude
Life insurance plans in India can be a smart choice for NRIS settled in the US as they are designed to offer higher coverage, and with a strong exchange rate between USD and INR, NRIs in the US can benefit from affordable premiums. Make sure to check the exchange rate, policy details and coverage before purchasing a plan.
FAQs
Are life insurance plans in India more economical for NRIs in the US?
Life insurance plans in India might be more economical for NRIs in the US as plans in India offer higher coverage at affordable premiums. NRIs in the US can benefit from the strong exchange rate between the USD and INR that makes plans in India affordable.
What type of life insurance plans in India can NRIs purchase?
NRIs have a wide array of life insurance plans in India to choose from, including term insurance, endowment plans, money back plans, child plans, pension plans, etc.
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