Term Insurance for NRI

If you’re an Indian living abroad, financial planning often comes with extra layers of complexity. Different currencies, changing residency status, tax implications across countries, and limited access to Indian financial products can make long-term protection feel confusing. One of the most common questions NRIs ask is whether Term Insurance for NRIs in India is worth buying, or even possible at all.

At Ditto, we’ve carefully reviewed IRDAI guidelines, insurer disclosures, policy brochures, and claim settlement data to understand how Term Insurance for NRIs actually works in the real world. 

In this blog, we break down everything you need to know, from eligibility and plan types to claim settlement and tax benefits, so you can make a confident decision.

What is Term Insurance for NRIs?

Term insurance is the simplest and most affordable form of life insurance. You pay a premium, and if something happens to you during the policy term, your family gets a lump sum amount (called the sum assured). 

For NRIs, the concept of term insurance is essentially the same, but there are certain nuances. These policies are specifically designed for Indians living and working abroad, offering coverage that extends globally, with some exceptions based on your country of residence.

Practical Aspect of Term Insurance for NRIs

The policy is issued in Indian Rupees (INR), claims are settled in India, and the nominee is typically your family residing in India. They will receive the payout in INR, so they must have an Indian bank account to facilitate a smooth transfer of the payout.

Your nominee can be anyone from your spouse, parent, child, or even your siblings. Although they don’t have to be in India at the time of the claim, having an Indian bank account is essential to receive the funds. 

If your nominee is also an NRI, they may need to use their NRE/NRO account to repatriate the funds if required. This is important to plan for to ensure that your nominee has easy access to an Indian account if needed.

Eligibility Criteria for Term Insurance for NRI in India

Most Indian insurers follow similar eligibility rules for Term Insurance for NRI, with slight variations:

• Residency Status: 
  To be eligible for term insurance, you must be an NRI (Non-Resident Indian), OCI (Overseas Citizen of India), or PIO (Person of Indian Origin). However, OCI and PIO applicants usually require special approval due to the complexity of documentation. It’s advisable to confirm the specifics with your insurer before applying.
• Entry Age: 
  Most insurers accept applicants aged between 18 and 60 years. Some plans, however, may extend coverage up to 65 years, depending on the specific policy.
• Maximum Maturity Age: 
  While the typical upper age limit is 85 years, some policies provide coverage up to 99 or even 100 years. The exact age limit depends on the insurer and the type of plan you choose.
• Health and Medical Assessment: 
  Medical underwriting is an essential part of the application process. Depending on your age, the sum assured, and your medical history, you may be required to undergo medical tests.

1. If you're young and in good health, some insurers offer pre-approved coverage up to a certain sum assured limit without needing physical tests.
2. For older applicants or those with a history of health conditions, a physical medical examination may be required.
   
   Quick Note: Many insurers offer telemedical or video medical check-ups in certain countries, which can make the process more convenient. If necessary, you can also opt to have the medical exam done during a visit to India. Insurers are generally flexible, allowing you to complete the exam either abroad or upon returning to India.
   
   Your application is also generally put on hold until the medical process is completed.

• Income and Occupation Requirements: 
  Most insurers require that you have a stable income to afford the premiums. A minimum annual income of ₹10 lakh (converted to INR) is commonly expected. Additionally, insurers will assess your occupation to gauge the stability of your earnings.

1. Occupation: Applicants with stable, well-paying jobs (like those in management or professional sectors) are usually preferred.
2. Education: A graduate degree is often a preferred qualification, though some insurers make exceptions for applicants with a 12th-grade education. This helps insurers assess the potential stability of the applicant’s income.
   
   When you apply, you'll need to submit proof of income (such as salary slips or bank statements) to demonstrate you meet the income requirements.
   
   Note: In some cases, housewives who are NRIs can also get term insurance based on their spouse’s income or a surrogate income source.

• Country of Residence
  
  Most term plans offer worldwide coverage, but it’s important to note that insurers maintain lists of high-risk countries. If you reside in a region with political instability or a war zone, there could be limitations on your coverage, or you may face additional premiums (referred to as “loading”). It’s wise to check with the insurer if your current country of residence is serviceable.
  On a positive note, popular destinations, such as the USA, Canada, the UK, the UAE, Singapore, Australia, etc., are generally all covered without issues.

Types of Term Insurance Plans Available for NRI

1) Level Term Plan

The sum assured remains constant throughout the policy term in a level term insurance plan. This is the most common and cost-effective option.

2) Increasing Term Plan

The life cover increases periodically to counter inflation in an increasing term insurance plan.

3) Decreasing Term Plan

The cover reduces over time, typically aligned with liabilities like home loans in a decreasing term insurance plan.

4) Term Plan with Return of Premium (TROP)

In a TRoP plan, Premiums are returned if the NRI survives the policy term. It’s usually not recommended because premiums are higher.

Best Term Insurance Plans for NRIs in India

Each of these Term Insurance for NRI plans has unique strengths, and the “best” option depends on your age, income, country of residence, and family structure.

Premium Comparison of NRI Term Insurance Plans

For this example, let us consider the profiles of non-smoking, healthy individuals, covered till the age of 65. 

Ditto’s Take: Our primary recommendations for NRIs applying from overseas remain Bajaj and Axis Max Life, given their willingness to conduct medicals abroad or at least reimburse costs, and their overall smooth processes.

However, if you are in India and have sufficient time to go through the application process (2-4 weeks), then all plans can be considered. Previously, we’ve had many NRIs plan their visit, application, and ask us to coordinate their medicals around this. Moreover, the insurer typically covers the cost of a medical check-up when you’re in India. 

Riders Offered with NRI Term Insurance

These riders provide additional protection against specific risks, though their availability can vary based on the NRI’s country of residence, age, and underwriting norms.

1) Accidental Death Benefit

This rider pays an additional lump-sum amount if the policyholder’s death occurs due to an accident. Insurers like HDFC Life and Tata AIA typically offer an accidental death benefit rider with their term plans for NRIs.

2) Critical Illness Rider 

Provides a lump-sum payout if the insured NRI is diagnosed with any of the specified critical illnesses (such as cancer, heart attack, or stroke) during the policy term. HDFC Life Click 2 Protect Supreme allows NRIs to opt for a critical illness rider, subject to medical underwriting. However, certain insurers may not offer this rider to NRIs living in countries with limited medical reporting standards.

3) Waiver of Premium

Waives all future premiums if the policyholder becomes permanently disabled or critically ill, while the life cover continues uninterrupted. HDFC Life commonly offers a waiver of premium rider with its NRI term insurance plans.

4) Total & Permanent Disability Rider

Pays a benefit or waives future premiums if the insured NRI suffers permanent total disability due to illness or accident. Bajaj Life offers an inbuilt premium waiver on accidental total and permanent disability. On the other hand, Axis Max Life has a combined accidental death and disability rider, while HDFC Life has an income benefit on an accidental disability rider. 

However, the availability may be limited for NRIs working in hazardous professions or residing in specific regions.

Important Note: Rider options under Term Insurance for NRI are not uniform across insurers. The availability depends on your country of residence, medical and product underwriting rules, and occupation risk category.

As a result, two NRIs applying for the same base plan may be offered different rider combinations.

Features of NRI Term Insurance

1) Global Coverage

The death benefit is payable whether the policyholder dies in India or abroad, as long as it is not in an excluded or high-risk zone. This worldwide protection gives peace of mind, especially for NRIs who travel frequently or move between countries for work.

2) High Coverage Amount Options

You can start as low as around ₹50 lakh and go up to ₹10 crore of coverage. Some large insurers even allow higher covers (₹20 crore or more) based on your income and profile. The idea is to give you enough range, whether you want a modest cover or an extensive one; there’s flexibility.

Benefits of Term Insurance for NRIs

Here are some compelling reasons why NRIs often find India the best place to secure a life cover:

1) Lower Premiums: 

Term insurance premiums in India are much more affordable compared to those in many developed countries. Thanks to factors like lower mortality rates in India’s insured pool and cost-efficient operations, you could save anywhere from 10% to 50% on premiums by opting for an Indian policy.

In some cases, NRIs have found equivalent coverage at half or even one-third the cost they’d pay abroad. This cost advantage is a big draw as you can get the same $1 million (about ₹ 9Cr at the time of writing this) of coverage for a lot less money when bought in India.

Moreover, when you buy a term insurance policy in India, your premiums get locked in for the entire policy tenure. In contrast, term plans abroad (U.S., U.K., Singapore, etc.) usually lock in premiums for only 20-30 years. After that, you can renew or extend coverage only at much higher rates, often with fresh medical underwriting.

2) Simple and Quick Claim Process:

An Indian term plan means your family can claim right here in India, through the insurer’s local office or online portal. They won’t need to coordinate with a foreign insurance company or travel abroad to settle claims. All documentation (death certificate, claim forms) can be handled within India.

Insurers also often assign a dedicated claim officer for NRI policies to guide the nominee. India’s top insurers have very high claim settlement ratios (97% +), so your loved ones can trust that the claim will be honored promptly. 

In fact, IRDAI regulations mandate timely claim settlement (within 15 days of document submission or 45 days with investigation), and some insurers even offer express claim settlement in as little as 3 hours for straightforward cases (subject to t&c).

3) Family’s Familiarity and Comfort:

Often, NRIs choose Indian insurance because their family members in India are more familiar with Indian institutions. Your spouse or parents might find it intimidating to deal with an overseas insurer, especially during a claim. Domestic policy means they can walk into the insurer's local branch or talk to an agent/insurance advisor in their own language. This local touch can make a huge difference in ensuring your family actually gets the benefit without hiccups.

4) Competitive Features and Options:

India’s term insurance market is highly competitive, with 20+ insurers constantly innovating to differentiate their offerings. As a result, many plans come with valuable inbuilt features that go beyond basic death cover. 

For instance, some policies now offer a special exit or zero-cost option that lets you leave the plan at a certain milestone (say, age 60) and get all your premiums back. Others include premium break options, allowing you to defer premiums during financially tight years, or a terminal illness benefit, which triggers an early payout upon diagnosis of a terminal condition.

You’ll also find features like instant payouts on claim intimation (to help the family deal with urgent expenses) and health management services bundled into certain plans.

Tax Benefits on Term Insurance for NRIs

NRIs can avail tax benefits on Term Insurance under Indian tax laws:

• Section 80C: You can claim a deduction of up to ₹1.5 Lakhs on premiums paid if you have income that is taxable in India. (Under the old regime).
• Section 10(10D): The payout (death benefit) received by your family is generally tax-free in India, regardless of the regime opted for.

Note: You should check the tax laws of the country you currently reside in as well.

Premium Payment Options for NRI Term Insurance

NRIs can pay premiums for Term Insurance for NRIs using:

• NRE Account
• NRO Account
• FCNR Account
• International Debit/Credit Cards
• Direct Foreign Bank Transfers (select insurers)

Premiums are usually payable annually, half-yearly, quarterly, or monthly.

Ditto’s Expert Insight: Having previously assisted many NRIs with their term insurance, we’ve realised that they usually prefer limited premium payment terms instead of having to pay premiums throughout the policy tenure. This is mainly because they enjoy higher disposable incomes abroad, which allows them to meet premium obligations sooner.

Limited payment options also offer convenience and financial flexibility, especially for those who plan to retire early or relocate permanently to India. This approach ensures long-term protection without the burden of ongoing payments later in life.

How NRIs Can Buy Term Insurance in India?

01

Research the insurer thoroughly

Start by shortlisting credible insurers. Check their Claim Settlement Ratio (CSR), Amount Settlement Ratio (ASR), solvency ratio , and overall financial strength. These metrics indicate the insurer’s ability to honour claims in the long run.

02

Identify your coverage needs

Assess your personal and financial situation by considering your age, income, dependents, lifestyle, future goals, and inflation. This will help you determine the right sum assured and policy term for your needs. If you want, you can also check out the cover calculator tool on our website.

03

Review policy terms and payment options

Understand the policy structure, premium frequency, and payment modes. Most Term Insurance for NRI plans allow premiums via NRE/NRO accounts or international debit/credit cards, offering flexibility for overseas residents.

04

Read the fine print carefully

Before purchasing, review exclusions, claim procedures, renewal conditions, and documentation requirements. This ensures there are no surprises during claim settlement.

As NRI term plan applications can be complex due to the nature of underwriting processes, the documentation can take longer. You can expect it to take anywhere from 2 weeks to 2 months, depending on the case, whether re-insurer approval or opinion is required. 

While buying a term plan, you should be prepared for this. Although the process might feel burdensome, it’s a one-time thing for a lifetime of peace for your loved ones and dependents.

Ditto’s Advice: For individuals living in India, it’s generally advisable to choose a term insurance duration that extends up to age 60-70. The stage when most people have retired, their children are financially independent, and major loans are repaid. 

The same reasoning holds true for NRIs: the goal is to align life cover with the period of financial responsibility, not one’s entire lifetime.

However, NRIs should also factor in higher life expectancy and longer working years in many countries abroad. Since people in developed economies often retire later and live longer on average. Ultimately, the ideal term should reflect both personal financial milestones and the longevity trends of the country of residence

Documents Required to Buy NRI Term Insurance 

1) Identity & Residency Proof

• Valid passport (first and last page)
• Visa/work permit/residence permit
• Overseas address proof (utility bill, bank statement, rental agreement, etc.)
• FTIN (Foreign Tax Identification Number) of equivalent - If not available, you can simply email the insurer’s helpdesk stating the same.

2) Income Proof

• Latest salary slips or employment contract
• Overseas bank statements
• Tax returns filed in the country of residence (if available)

3) Indian Banking Details

NRE/NRO/FCNR account details (cancelled cheque or bank statement)

4) Medical Documents

• Medical test reports (conducted in India or abroad, as per insurer guidelines)
• Self-declared health questionnaire

5) Additional Declarations

• FATCA/CRS declaration
• Proposal form with complete disclosure of lifestyle, travel, and occupation details

Providing accurate and complete documents upfront helps avoid underwriting delays and future claim complications.

Claim Settlement Process for NRI Term Insurance

The claim settlement process for Term Insurance for NRI is structured and largely similar to resident Indian policies, with a few additional requirements when death occurs abroad. Here’s a step-by-step guide: 

1) Claim Intimation

The nominee informs the insurer about the claim via email, website, or customer support as soon as possible.

2) Document Submission

The nominee submits the required documents, including:

• Claim form
• Death certificate (attested; translated if issued overseas)
• Policy document
• Nominee’s identity and bank details
• Cause of death and medical records (if applicable)

3) Claim Evaluation

The insurer reviews the claim based on policy terms, disclosures made at purchase, and submitted documents. Additional verification may be required for overseas deaths.

4) Claim Payout

Once approved, the death benefit is paid to the nominee’s Indian or overseas bank account, subject to RBI and FEMA guidelines.

Important Note: Claims are typically settled in Indian rupees, even if premiums were paid from abroad.

Why Choose Ditto for Term Insurance?

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Conclusion: Should NRIs Purchase Term Insurance from India?

NRIs should absolutely purchase term insurance as it is cost-effective, reliable, and well-regulated. In fact, the earlier you buy, the cheaper it can be. This is because premiums are lowest at younger ages. Moreover, once your policy is issued, any future health issues won’t affect the underwriting or premiums. 

If you procrastinate about this, you might end up leaving your family unprotected. Many NRIs in their 20s think they’ll buy in their 30s, but if you’ve got anyone depending on you (even your parents), it’s wise to start today. 

Note: Premiums for term insurance increase exponentially with age. Between ages 25 and 45, the cost for a ₹3-5 crore cover nearly triples across all insurers. This happens because each passing year increases mortality risk.

Having said that, choosing the right insurer and plan is critical. With the right guidance, term life insurance for NRI can be one of the smartest financial decisions you make.