Term Plans for NRI

This is a type of life insurance that or years or a certain period of time. If the insured dies during the period when the policy is active, then death benefits will be paid to nominee.

Term insurance is much less expensive than permanent life insurance. It has no cash value. There are different types of policies available. They differ in terms of policy periods and premiums payable.

The premiums remain same for a set number of years, after which it increases considerably. Most of the policies can be converted to a permanent policy regardless of the change in the insured's health.

Insurance is meant to provide the dependents with enough money to replace the policy holder's income, if the policy holder dies. When choosing the sum assured, the policy holder must take into account the basic expenditure the family will incur, major expenses like education and other liabilities. If the insurance benefits doesn't cover the essential financial needs, the whole purpose of the life insurance policy is defeated.

Policy Tenure and Coverage

Experts believe that has to cover a person till the age of 65 years. If you take a policy for a lesser term, then you will be not covering the risky years. If you plan to take an insurance policy at the age of 40, there is a good chance it will be expensive and if you have any disease, you might not get any coverage.

Inflation plays a significant role in deciding the policy value. If you have bought a policy worth Rs.50 lakhs, the value after 10 years might reduce significantly. To get around this, insurance companies offer plans where covers are increased by 5-10% every year or is indexed to inflation rates.

Certain plans also allow you to increase the sum assured at certain stages of life like, when you marry, buy a home or upon birth of your first child or at third or fifth year anniversary of policy purchase. The revised cover cannot be more than 3 times the original sum assured. But the premiums are higher for such plans.

The cover is reduced once your big credits are repaid. Hence it is advisable to take up simple plans rather than those offering complex plans. Single premium options are not a good idea either as the premium for the rest of the term goes waste in case of death.

Let's see what the major companies have to offer to the NRIs.

Bajaj Allianz Term Insurance Plan - iSecure For NRI

A person's main concern is to secure your family against all odds. An unforeseen incident may put your family in financial jeopardy. Bajaj Allianz Term Insurance gives a level term cover for a high sum at a low cost.

1. Eligibility: 18 years - 60 years
2. Minimum Sum Assured: Rs.2.5 lakhs for general category and Rs.20 lakhs for categories divided by preferred non-smoker, non-smoker and smoker.
3. Maximum Sum Assured: No Limit.
4. Policy Term: 10, 15, 20, 25 and 30 years.
5. Maturity age: Minimum-28 years Maximum- 70 years.

Benefits:

1. Tax benefits:
   1. Premiums paid are eligible for tax benefits under Section 80C of the Income Tax Act.
   2. Death benefits are also eligible for tax benefits or exemptions under the Section 10(10D) of the Income Tax Act.
2. Death benefits:
   1. Individual life: In case of the death of the insured, the sum assured is given provided the premiums are up-to-date. The policy cover is terminated on death of the insured.
   2. Joint life: The death benefit is payable on the death of each individual, provided the policy is in-force. The policy will continue for the surviving insured but with a reduced premium. The reduction is based on age, lifestyle, policy term, premium payment frequency and the sum assured of the surviving insured at the inception of the policy. The policy will cease to be effective immediately on the death of the surviving insured individuals.

Features:

1. The nominee can take the death benefit in equal monthly instalments over a period of 5 or 10 years.
2. Policy term can be selected based on your requirements.
3. Frequency of premium payments can be altered.
4. If you were single when you first took the policy, you can include your spouse on a later date in your existing policy.
5. Recurring expenses of your dependents can be met by opting for payment of benefit in annual instalments.
6. Categorization is available for sum assured of Rs.20 lakhs and above. The assured will be subject to medical tests. A non-smoker who has irregularities or family history but has no risky occupation, will be classified as a preferred non-smoker.

Kotak Life Insurance

Kotak life insurance offers NRIs an option to invest in India, and helps you harness every opportunity to reap the benefits of timely investments. Kotak offers Kotak Preferred Term Plan and Kotak Term Plan to NRI's

Kotak Preferred Term Plan:

1. Eligibility: 18 years - 65 years
2. Minimum Sum Assured: Rs.25 lakhs.
3. Maximum Sum Assured: No Limit.
4. Policy Term: 5 - 40 years.
5. Maturity age: Minimum-23 years Maximum- 75 years.
6. Tax Benefits: You can avail tax benefits under the Income Tax Act under Section 80C for the premiums paid and under Section 10(10D) for the death benefits received by the nominee.

Features:

1. High level of protection at a minimal cost.
2. Insured can opt for Immediate Payout or Recurring Payout.
3. You can increase or decrease the level of cover as per your requirement.
4. Preferred rates are available for females and non-tobacco users.
5. Flexibility in premium payment options.

Kotak Term Plan:

1. Eligibility: 18 years - 65 years
2. Minimum Sum Assured: Rs.3 lakhs- Rs.24,99,999 lakhs.
3. Maximum Sum Assured: No Limit.
4. Policy Term: 5 - 30 years.
5. Maturity age: Maximum- 70 years.
6. Tax Benefits: You can avail tax benefits under the Income Tax Act under Section 80C for premiums paid and under Section 10(10D) for death benefits received.

Features:

1. High level of protection at a minimal cost.
2. Preferential rates for females and non-smokers.
3. High level of flexibility in paying premiums.
4. Specific products can be converted to Kotak Life Insurance plans except for term plans before the last 5 years of the policy term.
5. Optional Rider plan is available:

Kotak Critical Illness Benefit - A portion of the sum assured is paid on admission of a critical illness claim.

Kotak Accidental Death Benefit - Lump sum benefit is paid on accidental death.

Kotak Permanent Disability Benefit - Upon admission of claim of disability, payments are made in instalments.

Amulya Jeevan Term Insurance Policy

LIC offers Amulya Jeevan Term Insurance Policy for the NRIs.

1. Eligibility: 18 years - 60 years
2. Minimum Sum Assured: Rs.25 lakhs.
3. Maximum Sum Assured: No Limit.
4. Policy Term: 5 - 35 years.
5. Maturity age: Maximum 70 years.
6. Tax Benefits: You can avail tax benefits under the Income Tax Act under Section 80C for the premiums paid and under Section 10(10D) for the death benefit.
7. Sum assured is payable in case of the unfortunate death of the insured, provided the policy is in force at time of death.

Features:

1. No loan will be available to the insured under this plan.
2. If you are not satisfied with the policy, you can return the policy within 15 days of buying it.

Exclusions:

1. The policy is void if the insured commits suicide.
2. After 2 years of the expiry of the policy, the insured cannot question the policy based on its terms.
3. Surrender value is also not available to the insured.
4. Maturity benefit is not available.

ICICI Pru iProtect

ICICI Bank offers ICICI Pru iProtect, term insurance for NRIs. This policy can be bought online at your convenience. The plan can be optimised as per your need. The first option being, where the death benefit is equal to the sum assured. The second option being, an Additional Death Benefit that is equal to the base amount or Rs.50 lakhs, whichever is lower is payable in case of death due to accident.

1. Eligibility: 20 years - 65 years
2. Minimum Premium paid: Rs.2,000 excluding service tax and education cess.
3. Policy Term: 10/15/20/25/30 years.
4. Maturity age: Maximum 75 years.
5. Tax Benefits: You can avail tax benefits under the Income Tax Act under Section 80C for the premiums paid.

Benefits:

1. Death benefit under iProtect Option I, you get the sum assured. Under iProtect Option II, you get the sum assured plus the Accidental Death Benefit.
2. Instant Life Insurance cover.

Features:

1. Affordable premiums.
2. Special premium rates for non-tobacco users.
3. Additional pay out on death due to accident.

Exclusions:

1. No maturity benefits.
2. No surrender benefits.
3. In case the insured commits suicide within one year from the date of commencement of the policy, the policy will be terminated.

There are many companies offering Term Insurance for NRIs which can be bought and managed online. Since it is less expensive than life insurance plans bought through traditional modes, and since the policy period is based on term, it is mostly preferred by the NRIs.

Popular Life Insurance Plans

1. Pradhan Mantri Jeevan Jyoti Bima Yojana
2. Postal Life Insurance
3. Rural Postal Life Insurance
4. Unit Linked Insurance Plans