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  • Guide for NRIs to Purchase Health Insurance in India

    Medical tourism is on high rise in India and inflation too has added to the number of non-residents seeking medical treatments in this land of infinite varieties. With the insurance sector expanding at a rapid pace, NRIs have a lot of options to be prepared for medical emergencies whenever they return to India. Though many factors influence people to come to India for healthcare treatments, the implications of health insurance, its clauses and legal terms too have a role to play. So, as an NRI with plans of settling in your homeland in the near future, you should have a thorough understanding of the pros and cons of buying health insurance policies in India. It is advisable that one should assess the restrictions and other conditions mentioned in the policy and give weightage to the duration of time before relocating.

    Here are a few things for NRIs to know about the health insurance options available to them.

    Conditions for making an insurance application

    NRIs are allowed insurance facilities 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.

    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.

    Additional points for NRIs planning to buy a health insurance policy in India

    • 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.
    • 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.
    • 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.

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