When you plan your finances, buying life insurance is one decision you would have to make. With a plethora of options available, it can get confusing when it comes to choosing the type of insurance to buy. There is no one best type for all, as each has its own set of drawbacks and advantages. One such type of life insurance that has become quite popular lately, is term insurance.
What is a term plan?
So you might have come across “term insurance” many times, but what is a term plan? In simple terms, it provide life cover to an individual for a fixed tenure. The policyholder can choose their tenure before buying a term policy. The number of premiums that you would pay for term insurance is usually quite low when compared to traditional life insurance. Term insurances are popular for their low premiums and high life coverage. When you buy a term plan, you secure the lives of your loved ones without digging a huge hole in your pocket.
Is your term insurance valid abroad?
Life is uncertain and there might arise a time when you are leaving India for better opportunities or personal reasons. When you decide to leave the country, think about your existing financial instruments and how they are affected by your decision. Regarding your insurance, yes, your term insurance is valid abroad. You can continue to pay your premiums and retain the sum assured benefit. As non-resident Indians (NRIs) and Persons of Indian Origin (PIOs), you are allowed to buy and continue term insurance offered by insurance companies in India.
If you were a citizen of India when you bought insurance and then moved abroad, it is your responsibility to keep the insurance company in the loop. You must inform the company about which country you are planning to live in. According to your country of residence, the risks associated with your life might change too. Based on the risks, our insurer may change your term plan or keep it as it is. Also, in any unforeseen situation, if the policyholder is no more, and the demise was outside India, it is covered by the term plan, too. As long as the policyholder’s demise is within the tenure of the term policy, they are covered, and the nominee will receive the death benefits.
Apart from moving abroad after buying term insurance, you can buy a term plan abroad too. You can simply buy an online term plan or approach an agent to get term insurance. After you submit the documents, you can make pay premiums and get a life cover.
What documents do you need to buy term insurance for an NRI?
The documents needed can slightly vary from one insurance company to another. However, most of them usually remain the same. They are-
- Application form or proposal form that is fully filled.
- Proof of identity, age, address, and income.
- Medical reports that reflect your current health condition.
- A copy of your passport that is attested.
When you are buying an online term plan, your insurer may ask you to submit the details of any pre-existing medical conditions. An insurance company should be well-aware of your health condition before you buy insurance. Concealing any information may lead to loss of insurance cover. Also, when you buy term insurance, most companies require you to pay the amount of the first premium as application fees.
What documents do you need for the claim settlement of an NRI policyholder?
In case of the demise of an NRI policyholder, the nominee is required to submit documents for gaining the initial claim. These documents include-
- Cause of death certificate
- Copy of death certificate that is verified by the Indian embassy of the country of policyholder’s residency
- Employer certificate that includes leave and contact details
Several Indians these days move abroad for employment opportunities and education. When you buy term insurance and move abroad later, you can rest assured that your safety net is as it is. However, before you move to another country, it is important to check with your insurance company regarding your term insurance. As there are some countries where most Indian insurance companies refrain from providing services. These countries usually are in the high-risk category from a geographical perspective.
