This blog will answer a frequently asked question –
Is term insurance valid outside India?
The answer is, yes it is. Non-resident Indians (NRIs) and Persons of Indian Origin (PIOs) are allowed to invest in term insurance plans offered by India based insurers. Before we get down to pre-requisites of having term insurance plans in India as an NRI or PIO, let us know who all constitute a Non-resident Indian (NRI) or Person of Indian Origin (PIO). They are Indian citizens or foreign nationals of Indian origin who can trace their birth, descent, or origin to the Republic of India. The NRI population also includes spouses, parents and children of those individuals who have moved abroad to seek employment. For more details, please refer the definitions provided under Income-tax Act 1961 and the Ministry of External Affairs Except for a few changes, the process involved in purchasing term insurance is nearly similar for both residents and non-residents.
Another question that may arise is whether the death of an Indian citizen outside India is covered by term insurance. The answer is, yes it is. For a short trip, a natural death is generally covered irrespective of where it occurs. However, it may so happen that you purchase a term insurance as an Indian citizen but are required to move abroad due to employment or other reasons during your policy term. You may be considered an NRI after purchasing your term plan as an Indian citizen. In such a case, you must inform your insurer of your plans of settling in a foreign country. A lot depends on the place that you are moving to and the risks associated with it. Your policy may remain unchanged or may be modified.