Term Insurance for NRIs

Term Insurance for NRI can be defined as a term life insurance plan specifically designed to cater to the unique protection needs of Non-resident Indians (NRIs) and their family members. Such NRI Term Insurance policies can be purchased from the IRDAI-approved life insurance companies in India, even though the applicant is residing temporarily in a foreign country.

However, the purchase and disbursals related to such life insurance plans for NRIs are subject to FEMA (Foreign Exchange Management Act) guidelines and other applicable IRDAI (Insurance Regulatory and Development Authority of India) regulations. Read on to know further details related to the NRI term insurance policies in India:

For those of you searching for the best NRI term insurance plans in India in 2025, it is important to first understand the key features term life insurance policy for NRIs. Below, we have listed the features of term insurance for NRIs in 2025:

To make an informed decision regarding which NRI term insurance plan is suited to your needs, an understanding of key benefits of NRI term plans is also essential. It is only after this that one can compare and find an ideal term insurance policy for NRIs, as per their needs. Below-mentioned are some of the key benefits of that NRIs can receive by purchasing term insurance plans in India:

Term Insurance for NRIs work in a manner similar to the term insurance plans offered to resident Indians. All one needs to do is choose a suitable NRI term insurance, provide the required details, select the life cover, policy term, premium payment term and pay the first premium to commence with the policy.

You can definitely enhance the benefits of your term life insurance for NRI using the various riders offered, while these may feature additional premium payment, these benefits are over and above the benefits offered under the base plan.

Nowadays, some term insurance policies for NRIs also provide the feature known as Return of Premium. This feature enables premiums that have already been paid to be returned to the policyholder, subject to applicable terms and conditions specified in the policy document.

Term insurance policies purchased in India offer similar cover to both the NRIs and the resident Indians. NRIs fitting the applicable income criteria can easily get high life cover of 1 crore or higher via a suitable NRI term insurance plan subject to submission of required documentation.

Apart from cover amount, others factors to keep in mind are the premium payment term and the policy term that have to selected as part of the base cover. Additionally, there is an option to the enhance protection offered under the NRI term policy via policy add-ons like critical illness and disability, accelerated critical illness cover, accidental death or dismemberment benefit, terminal illness cover, etc.

In addition, NRI life insurance policies also provide the option of choosing different death benefit pay-out options such as lump sum pay-out, instalment pay-outs or a combination of the two depending on the applicant’s understanding of the expected future financial needs of the policy beneficiaries.

There are many reasons for NRIs to purchase term insurance plans in India. Some of the key ones are:

Riders and add-on are optional enhancements that can be purchased along with a base term plan to provide additional protection to the policyholder and/or beneficiaries. Typically, the purchase of such add-ons and riders require the payment of an additional premium that is charged over and above the premium applicable in the case of a base term plan.

Below are some of the commonly available riders and add-ons that be purchased along with a NRI term policy in India:

The below categories of applicants are eligible to buy NRI term plans in India, subject to applicable terms and conditions that can vary from one insurer to another:

Non-resident Indians purchasing a life insurance plan in India can be broadly classified into 2 categories – those purchasing the policy in India and those purchasing from overseas. There are some key differences in the NRI term insurance purchasing process, depending on the current residing location of the applicant. The same are detailed below:

The documents required for NRIs term insurance policies in India are slightly different from the documents required if a resident Indian is purchasing a similar plan. While the list of documents required for KYC (Know Your Customer) requirements may differ slightly from one insurance company to another, below are some examples of documents that are asked by the insurance companies at large:

To claim NRI term insurance in India in 2025, one must initiate the claims process by firstly, notifying the insurance company about the death of the life insured. This should preferably be done in writing, via post or visiting the insurer office in person and submitting the written notification. Typically, a copy of death certificate of the life insured also has to be submitted with the insurer. Once this is done, the nominee or the beneficiary should receive an acknowledgement for the same.

It is important that the claimant reads the policy document carefully and collates all the documents required to raise death claim for NRI term insurance. The applicable documents along with the claim application form provided by the insurance company typically must be submitted within a specific period as mentioned in the policy document. This can help ensure that the chances of a delay are minimised. 

After submission of the required documents, the company shall look into the claim and after successful verification, shall release the death benefit as per the policy document.

Below-listed are the documents that typically need to be produced by the claimant for raising a death claims for NRI term insurance in India in 2025:

Just like a regular term plan, there are multiple premium payment options for NRI term insurance plans in India. NRIs can choose to pay their premium annually, semi-annually, quarterly etc. To make premium payment towards their term insurance plans, NRIs can choose various financial instruments like cheques, credit cards, internet banking etc.

The payment of NRI life insurance policies can be done either in Indian rupee or various other accepted foreign currencies. If the NRI term plan policyholder wants to make premium payments in Indian currency, they can use their NRE (Non-Resident External) or Non-Resident Ordinary (NRO) accounts.

Additionally, many life insurance companies in India also allow NRI policyholders to pay premiums directly from their overseas account into the insurer account in India. However, there can be some restrictions in the case of such international remittances.

Many Indian life insurance companies also accept online premium payments for policy renewal through international credit cards. Even in such cases, the first premium payment made at the time of purchase needs to be made through a NRE/NRO or Foreign currency account held with a bank in India.

NRIs residing in the United States are required to comply with FATCA (Foreign Account Tax Compliance Act) and CRS (Common Reporting Standard) rules as specified by the United States IRS (Internal Revenue Service) and India CBDT (Central Board of Direct Taxes) guidelines. The details of these guidelines are available on the official Income Tax Department and Reserve Bank of India (RBI) website. The key reason for implementation of FATCA/CRS compliance is to prevent US residents and citizens from avoiding tax in the US by parking wealth generated in the US in foreign countries.

FATCA/CRS declaration is currently mandatory for any NRI based in the US who is purchasing any type of life insurance policy in India. This declaration has a standardized format and needs to be filled out and submitted to the life insurance company along with the life insurance proposal form. Some of the key details that need to be provided in the FATCA/CRS declaration are; TIN (Taxpayer Identification Number), Country of Tax and overseas address of the applicant.