3 Ways an NRI or PIO can pay life insurance premiums

Written by : Knowledge Centre Team

2020-12-08

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Banks have smoothened their working cycle to give insurance protection to Indians residing outside India. Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs) are permitted to put resources into term plans. If you are an NRI or PIO, you can buy life insurance plans offered by Canara HSBC Life Insurance. Here are a few things to consider while buying a life insurance cover for NRI and PIO:

The Indian who lives in the other country under 182 days over the first monetary year can get the insurance cover.
The insurance holder should be an Indian resident, this will guarantee inclusion to the protected, in any event, when he ventures or remains abroad.
It is said that a person should buy or get the insurance cover in person at whatever point they are in India to deal with the procedural and endorsing customs of insurance cover.
If a person is unable to visit India, they can get insurance cover through Mail Order Business (Online). In the online process, the person must conform to a public accountant, Indian ambassador, or authority of the concerned Indian government office abroad.
Banks also provide travel insurance for people travelling abroad like emergency medical treatment and assistance, legal travel assistance, emergency financial help. A person needs to consult the bank before choosing any travel insurance plan.

How an NRI or PIO Pay the Premium for a Life Insurance Cover?

These three simple ways can help an NRI or PIO pay the insurance cover for the premium amount.

1. Amount settlement in foreign currency

The bank features that help in converting the country’s currency of the respective country where the person is living, working, or studying. To transfer the money the person is required to contact the bank’s customer care executive, or by emailing, or by simply visiting the bank if the bank has its branch in the foreign country. Ideally, an amount is transferred between 3-4 business days to the account of the receiver.

2. NRO account

Non-Resident Ordinary (NRO) Account is a path for NRI and PIO to pay the amount, profits, benefits, lease, etc to employees or family.

NRO account helps the person localize or move the premium amount to any bank account of the nominee. A person can move the principal sum inside the indicated limits. A person can move up to USD 1 million of every one financial year of the insurance cover.
The premium that a person acquires on an NRO Account is available at 30%, deductible at source.
On the off chance that person funds incorporate their pay acquired in India and need a record to oversee it inside India, an NRO Account is an ideal choice for such circumstances.

3. FCNR bank account

FCNR is the Foreign Currency Non-Resident Account. If a person is living abroad but wants to keep a Fixed Deposit Account in India, a person can pick an FCNR Account that permits them to set aside cash acquired abroad in Foreign Currency. The amount is converted into:

US Dollars
Pounds
Euro
Japanese Yen
Australian Dollars
Canadian Dollars

What you need to remember-

FCNR Accounts are Deposit Accounts and not a Savings Account.
A person can open an FCNR Account by moving cash from their current Non-Resident External (NRE) Account.
The premium that a person acquires on FCNR accounts is tax-exempt, and it is not available in India.
A person can benefit from an overdraft office over their FCNR Term Deposit Account.

Types of Insurance for NRI and PIO

1. Life Insurance

Every person requires life insurance for themselves, for their children or on whom any liabilities they have will degenerate in their nonattendance. If a person decides to get a term insurance cover living abroad, without visiting India, then they should ask specific questions from the bank:

Can the amount be paid in the home currency?
The claimed money would be paid in which format NRE/NRO or any other format?
What is the inquiry that the bank will do from the NRI or PIO?
Is the insurance cover renewed?
What are interest charged on the insurance cover?
At what period a person can withdraw the insurance amount?

2. Medical Insurance

3. Personal Insurance

Personal insurance acts as a protection strategy that a person gets if any mishap or inadvertent event has happened. A person should check or ask the bank for the personal insurance policy as not every bank offers it to NRI and PIO.

In personal insurance cover, clinical costs repayment and mishap remuneration is paid by the banks in India and the amount is payable only in Indian rupees.

4. Other Insurance Cover

Banks provide NRI and PIO with a single insurance plan package, and they pay a single amount payout to the account holder. As an NRI and PIO, a person must present certain required medical documents to their bank to get the single insurance cover package.

Five Things to Remember while Choosing Life Insurance Cover from Canara HSBC Life Insurance

NRI and PIO can open the bank account.
A person can open the joint bank account with minimum two and maximum of four individuals.
A person can open only a KDR account.
The foreign currency that is to be invested in NRE is converted into rupee balance in the depositor’s NRE account.
For customer convenience, the bank converts the amount to the currency of the respective country.

There are specific terms that a person needs to follow to avail the benefit of insurance cover from the bank:

A person is required to give the precise mandate to receive the maturity amount in Indian rupees only for the credit of their NRESB/NRE/NROSB account.
If the person wants the insurance cover fund,they will get it only after one year.
If the person wants to withdraw their insurance cover from the bank, they can deposit certain bank charges.

How to Choose the Right Life Insurance Cover?

1. For Family Protection

Everyone needs security to shield their family from confronting any monetary difficulty while at their job abroad. To choose the ideal insurance cover for the family a person need to consider certain factors like, the number of wards a person have, is there any marriage in the coming years, age of family members, a person should also consider their current pay, how much compensation a person will get in their long term resources and liabilities.

2. Cost

People should check the cost they have to give to the bank to get the appropriate insurance cover. They should check the asset board expenses, mortality charges, renewable insurance charges, if any, etc. Before settling on any decision, a person should ensure that they have perused the fine print of cost involved cautiously to get the insurance cover.

3. Claim Settlement

The principal reason behind getting the insurance cover is that the family or close ones do not have to suffer the discomfort while a person is not in the country. A person should be aware of claim settlement procedure before choosing any insurance coverage plan the claim settlement is calculated in rate terms. The higher the proportion of claim settlement is, the more benefits the person is going to get.

4. Cover

A person should choose term insurance that covers every need, including the medical emergency. The cover should provide security which gives inclusion to an unrestricted timeframe. Term insurance cover should have an adequate amount that a person needs in an emergency or any unavoidable circumstances.

5. Unit-Linked Insurance Plan (ULIP)

It accommodates life insurance coverage, where the arrangement appreciates whenever shifts per the necessary resource’s estimation. ULIPs are a great way to manage your investment portfolio. You will get a life cover with an investment avenue where you can boost your wealth creation and legacy building strategy.

Insurance cover for NRI and PIO is a great option to keep them and their family secured. Insurance cover acts as an emergency asset that can help a person to overcome any difficult situation. It is always best to plan before any future emergency. The insurance covers premium account cover relies on banks policy term and condition, instalment recurrence, or any feature chosen while getting the insurance, etc. A person can pay the premium amount through settlement in NRO/NRE account holders. NRI and PIO must provide some documents to get the insurance cover like proposition structure, age confirmation document, health or medical report, application charge identical to the primary premium payable, etc. To get the renewal person is required to go through clinical assessments to meet the reestablishment measures. Also, NRI and PIO should guarantee that they don't default on the charges or deferral the expenses while applying for the insurance cover.