Guide for NRIs to Purchase Health Insurance in India

Advantages of NRIs Selecting Health Insurance

The advantages of NRIs selecting health insurance are given below: 

1. No geographical limitations: Health insurance policies often impose geographical restrictions, limiting coverage outside of the policyholder's country of residence. However, purchasing health insurance in India removes these constraints, offering coverage throughout the country. 
2. Adequate coverage: As an NRI visiting India, you may face specific health issues such as flu or stomach-related ailments. By opting for health insurance in India, you can ensure adequate coverage tailored to your needs, including high sum insured options and Personal Accident Cover. 

1. Tax benefits: Purchasing health insurance in India not only provides financial support for medical expenses but also offers tax benefits under section 80D of the Indian Income Tax Act. These tax benefits contribute to reducing the tax liability on taxable income, with the exact benefit determined by the premium paid and applicable tax slabs. 
2. Waiting period advantage: Certain health insurance policies require a waiting period before claims can be raised, particularly for pre-existing conditions. NRIs planning to permanently return to India can benefit from purchasing health insurance early to fulfill waiting period requirements. This strategy ensures that when they relocate to India permanently, the waiting period will have already been served. 
3. Continuous coverage: For NRIs who frequently travel to India, obtaining health insurance in the country ensures continuous coverage throughout the policy period. Whether the policy extends for one or two years, it eliminates the need to purchase insurance upon each visit to India during that period. 
4. Efficient claim settlement: When seeking medical assistance in India, settling claims with an India-based insurer, tends to be more streamlined compared to foreign-based insurers. India-based insurers often facilitate hassle-free cashless claims through their network of affiliated hospitals, minimizing paperwork and delays. 

How do Non-Resident Indians (NRIs) Apply for Indian Health Insurance?

The process of purchasing NRI insurance can vary among insurers and may not be as straightforward as it is for resident Indians. Here's an overview of the application process: 

1. Contact the insurer via website, app, call, or email. 
2. Meet the criteria by submitting required documents such as Passport number and Permanent Account Number (PAN) details. 
3. Select a plan of your choice. 
4. Undergo any necessary medical tests as required by the insurer. 
5. Pay the applicable premium. 
6. Receive the policy. 
7. Verify the details and rectify any issues if necessary. 

Eligibility for GST Refund for NRIs

1. The proposer must hold the status of a Non-Resident Indian (NRI). 
2. Criteria for insured members may vary between different insurance providers. 
3. Payment of health insurance premiums is mandatory on an annual basis. 
4. Premium payments must be made from an NRE (Non-Resident External) Account. 

What Documents are Required for a GST Refund?

The following documents are needed for securing a GST Refund:  

1. KYC (Know Your Customer) documents are a standard requirement. These include your proof of age, identity, and address.  
2. Additional documents may include a TRC (Tax Residency Certificate) 
3. International Address Proof. Acceptable international address proof documents include a utility bill, driver’s license, bank statement, or a government ID card/certificate. Residency in a foreign country for more than 180 days is a prerequisite for international address proof. 

1. Passport 
2. PAN Card 
3. One recent photograph 
4. NRE account bank statement, including a record of premium payments, may be required when applying for the refund. 

Purchasing Health Insurance for Indian Parents who do not Reside in India: 

When purchasing health insurance for NRI parents who will be visiting or relocating to India with you, consider the following factors to make an informed decision: 

1. Age: Keep in mind that insurance premiums typically increase with age. While insuring your parents, prioritize overall policy features over lower premiums, as age significantly impacts costs. 
2. Pre-existing diseases: Disclose any pre-existing conditions to the insurer during the policy purchase process. Pre-existing diseases are usually covered after a waiting period, so ensure this is clearly understood. 
3. Premium payments: The payable premium depends on factors like age, health condition, and policy duration. Long-term policies may offer lower premiums compared to short-term ones. 
4. Network hospitals: Check if the insurer has a wide network of quality hospitals. Opting for a policy with access to top-notch hospitals ensures hassle-free claim settlements, as treatment in network hospitals is often cashless. 
5. Coverage: Opt for a policy that provides comprehensive coverage, including sum insured and various policy features. Look for coverage beyond hospitalization, such as pre-hospitalization and post-hospitalization expenses. 

Foreign Exchange Management Act (FEMA) Rules & NRI Health Insurance

If you're an NRI seeking health insurance in India, it's essential to adhere to the regulations outlined in the Foreign Exchange Management Act (FEMA). This primarily deals with provisions for holding health insurance policies offered by insurers in the country of residence and guidelines for repatriating claim amounts in foreign currency. 

Conditions for Making an Insurance Application

NRIs are whenever they visit India, provided all procedures are completed during their period of stay. To apply for an insurance policy, the person should submit a duly filled proposal form along with documents such as an attested copy of passport, copy of pan card, details of the bank account in India and any additional information sought by the insurer. On completion of procedures the policies are issued, in which currency for future transactions is taken only in Indian rupees.

Terms of Geographical Coverage

This is one of the most important points in a policy contract and skipping this particular page while signing the agreement can sometimes be a great problem. Most of the insurance companies specify in their terms and conditions that the benefits and expenses covered under the plan are limited only for treatment in India.

For example, an NRI who lives in Singapore cannot avail any of the benefits covered in a health insurance plan he bought in India.

The Significance of Underwriting

Insurance companies have elaborate underwriting guidelines that serve as benchmarks for a particular type of policy issued by the company. The terms and conditions for an NRI application will be different from that of a general application for health insurance.

NRIs are considered more risky than normal applicants because the difficulty involved in confirming the facts furnished by NRIs are relatively high. Therefore health insurance companies set a certain limit on the sum assured and put stringent procedures in place.

Government Regulations

The regulations known as Foreign Exchange Management Act or FEMA stipulates the conditions with respect to the insurance policies bought inside and outside the country. It states that a person resident in India can continue to hold any policy issued by a foreign insurance company, provided the person has obtained prior permission of the concerned Indian authority at the time of its issuance.

For claims settlements, the amount insured may be credited to the person's foreign bank account or to his resident foreign currency account maintained by an authorized bank.

What are the Tax Benefits for NRIs

NRIs too are covered under the same tax exemptions as applicable to the residents under section 80D of the income tax act. Policyholders are eligible for deductions of Rs 25,000 for their policies and an additional Rs 25,000 deduction in case their resident parents are covered under the same health insurance plan.

NRIs can also avail tax benefits by purchasing health insurance in India. This applies if the policy is procured in the country, either for an individual or for parents. 

By purchasing health insurance in India, you become eligible for tax deductions according to the prevailing Income Tax regulations. Therefore, investing in health insurance can offer tax-saving benefits. 

Health Insurance Policy for NRI Senior Citizens

When insuring NRI senior citizens, it's essential to opt for a dedicated policy tailored to their needs, such as an Individual Health Insurance Policy. Avoid including them in a group cover like a Family Floater policy. If you choose to include them in a group cover, ensure that the sum insured is substantial, such as Rs.1 crore. 

When Should an NRI Refrain from Buying a Health Insurance Policy in India? 

While it's generally recommended for NRIs to have health insurance coverage while in India, there are circumstances where it may not be necessary: 

1. If the health insurance policy purchased in the country of residence provides comprehensive coverage, including in India. 
2. If you are visiting India briefly and have travel insurance that covers health-related risks. 
3. If you have no plans to permanently return to India in the foreseeable future. 

Difference between a Health Insurance Policy & a Mediclaim Policy for NRIs? 

The term ‘Mediclaim’ typically refers to insurance coverage specifically for hospitalization expenses. However, ‘Health Insurance’ may encompass coverage during hospitalization and before and after. However, the terms "health insurance for NRI" and ‘mediclaim for NRI’ may be used interchangeably for basic plans. Therefore, it's advisable to clarify the coverage details with the insurer before purchasing either policy. 

Additional Points for NRIs Planning to Buy a Health Insurance Policy in India:

1. If you plan to settle in India after 4 to 5 years, then it is ideal to opt for a health insurance plan in the country where your currently reside.
2. But if your return to India is within a period of 3 years, then it is desirable that you choose a health insurance policy while you are on a vacation to India. However, make sure that the terms and conditions of the plan you choose meets your requirements.
3. If you already maintain a health insurance policy in India and you are moving out of the country for a short period, it is preferable to maintain the policy while being abroad. But if you plan to stay out of India for a longer duration, then there is no point in keeping the plan active as with geographical restrictions you cannot avail any of the benefits.

GST rate of 18% applicable for all financial services effective July 1, 2017.

Disclaimer: Premiums may vary depending upon factors like age, location and prevailing taxes/GST.