Best Term Insurance Plans For NRIs In India

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Here’s something I’ve learned from helping thousands of NRIs over the years – term insurance is one of those things people keep putting off.

And I completely get it.

When you’re living abroad, juggling work, family, and the ever-present thought of “should I return to India?” – life insurance feels like just another item on an already overwhelming to-do list.

But here’s the reality.

Whether you’re planning to return or have already made the move, having a solid term insurance plan from India can be a smart financial decision.

The premiums are often 30-50% cheaper than international plans. And the coverage protects your family back home without any cross-border complications.

In this guide, I’ll walk you through everything you need to know – from the best plans available in 2025 to the exact process for buying one, whether you’re sitting in California or have just landed in Bangalore.

Why NRIs Should Consider Term Insurance from India

I’ve had this conversation countless times in our WhatsApp groups.

An NRI asks, “Why should I buy insurance from India when I can get it here in the US or UAE?”

Fair question. Here’s what I tell them:

Significantly lower premiums: Indian insurers offer term plans that cost 30-50% less than similar coverage abroad. For a Rs 1 crore cover, you might pay around Rs 10,000-15,000 annually – try getting that in the US or UK.
Family gets the payout in India: If your dependents are in India, having an Indian policy means they receive the death benefit directly in INR, in an Indian bank account. No currency conversion hassles, no international paperwork.
Global coverage: Most NRI term plans cover you worldwide. Whether you’re in Singapore, Canada, or back in Chennai – the policy stays valid.
Tax benefits: If you have income in India, premiums qualify for deductions under Section 80C. The death benefit is also tax-free under Section 10(10D).
No physical presence required: You can buy, pay premiums, and manage your policy entirely online. Video medical exams (VMER) mean you don’t need to fly to India just to get covered.

Two Scenarios: Planning to Return vs. Already Returned

Your situation matters when choosing a term plan.

Let me break down both scenarios.

Scenario 1: You’re Still Abroad and Planning to Return

This is actually the better time to buy. Here’s why:

Your income is likely higher abroad, so you can lock in a larger sum assured
Premiums are based on your current age – the younger you are, the cheaper it is
NRI-specific plans often include premium waivers and flexible payment options
You can pay premiums from your NRE/NRO account or through foreign remittance

What you need to know: When you return and become a resident, simply update your address with the insurer. Your policy continues without any issues. Some insurers may adjust your premium payment options, but coverage remains the same.

If you’re in the US, make sure you comply with FATCA and CRS requirements. Most major Indian insurers are set up to handle this.

Scenario 2: You’ve Already Returned to India

If you’ve recently moved back, you have two options:

Buy as a resident Indian: Once your residential status changes (after staying 182+ days in India), you can apply for regular term plans. These often have slightly lower premiums than NRI plans.
Convert existing NRI policy: If you bought a policy while abroad, inform your insurer about the status change. They’ll update your records and may switch your premium payment from NRE to a regular savings account.

Quick tip: If you’re in that transition phase – just returned but not yet completed 182 days – you can still apply as an NRI. Just be honest about your plans. Insurers appreciate transparency and it helps during claim settlement later.

If you’re navigating the 182-day residency rule, that guide explains how it affects your NRI status for tax purposes.

Best Term Insurance Plans for NRIs in 2025

After researching extensively and gathering feedback from our community, here are the plans that consistently come up as top choices for NRIs:

Plan Name	Claim Settlement Ratio (FY 24-25)	Key Features	Coverage	Best For
HDFC Life Click 2 Protect	99.68%	Multiple variants, critical illness rider, 1-day claim settlement	Up to Rs 10 Cr	US/UK NRIs
Max Life Smart Secure Plus	99.35%	Joint life option, increasing cover, premium sabbatical	Up to Rs 5 Cr	Couples
ICICI Pru iProtect Smart	99.04%	Coverage up to 99 years, 34 critical illness cover, terminal illness benefit	Up to Rs 5 Cr	Long-term coverage
Tata AIA Sampoorna Raksha Supreme	99.41%	Whole life coverage up to 100 years, maternity benefit, premium break option	Up to Rs 5 Cr	Young families
Bajaj Life eTouch	99.29%	Affordable premiums, online process, quick claim processing	Up to Rs 5 Cr	Budget-conscious
SBI Life eShield	99.20%	SBI bank integration, easy premium payment, trusted brand	Up to Rs 5 Cr	SBI account holders

Note: Claim Settlement Ratios are for FY 2024-25. Always check the latest figures before purchasing.

What to Look For When Choosing a Plan

Beyond just comparing premiums, here’s what actually matters:

1. Claim Settlement Ratio (CSR)

This is the most important number.

It tells you what percentage of claims the insurer actually pays out. Look for insurers with 98% or higher CSR consistently over 3-5 years.

A 99% CSR means 99 out of 100 genuine claims get paid. That’s the peace of mind you’re paying for.

2. Adequate Sum Assured

The general rule: your life cover should be 10-15 times your annual income.

If you earn Rs 20 lakhs per year, aim for at least Rs 2-3 crore coverage.

Factor in your outstanding loans, kids’ education costs, and how many years your family would need support. It’s better to be slightly over-insured than under-insured.

3. Useful Riders

Riders are add-ons that enhance your base policy. The ones worth considering:

Critical Illness Rider: Pays a lump sum if you’re diagnosed with specified illnesses like cancer, heart attack, or stroke
Accidental Death Benefit: Provides additional payout if death is due to an accident
Waiver of Premium: If you become disabled, future premiums are waived but coverage continues
Terminal Illness Benefit: Allows partial payout if diagnosed with a terminal illness

4. Flexible Payment Options

For NRIs, this is crucial. Check if the insurer allows:

Payment through NRE/NRO accounts
International credit/debit cards
Foreign wire transfers/remittances
Monthly, quarterly, or annual payment frequency

If you need help understanding NRE vs NRO accounts, that guide breaks it down simply.

How to Buy Term Insurance as an NRI – Step by Step

The process has become remarkably simple. Here’s exactly how it works:

Compare plans online. Use aggregator sites like Policybazaar or visit insurer websites directly. Filter for NRI-specific plans.
Fill the online application. Provide personal details, income information, and health history. Be completely honest – discrepancies can lead to claim rejection later.
Complete KYC. Upload required documents (list below). Most insurers now accept digital submissions.
Undergo medical examination. Either through a video medical exam (VMER) from your location abroad, or physical tests at partner labs if you’re visiting India.
Pay premium. Use your NRE/NRO account, international card, or wire transfer.
Receive policy document. The digital policy is sent to your email. Keep a copy safe and share details with your nominee.

Documents You’ll Need

Keep these ready before starting your application:

Valid Indian passport (front and back)
Valid visa copy
Foreign address proof (utility bill, bank statement, or resident ID)
Income proof (last 6 months salary slips or bank statements)
Employment ID or offer letter
Passport-size photograph
PAN card (if you have one)
Nominee’s details and ID proof

If you don’t have a PAN card yet, here’s how NRIs can apply for one.

How Claims Work for NRI Policies

This is the part nobody wants to think about, but it’s essential to understand.

Here’s what your nominee needs to do:

Notify the insurer: Contact the insurance company’s customer service or file a claim online as soon as possible.
Submit documents: Death certificate (if death occurred abroad, it must be attested by Indian Embassy/Consulate), original policy document, nominee’s ID proof, and bank details.
Investigation (if any): For deaths within the first 2-3 years of the policy, insurers typically conduct an investigation. This is standard practice.
Payout: Once verified, the death benefit is transferred to the nominee’s Indian bank account. Top insurers process non-investigative claims within 1-4 days.

Important: Make sure your nominee knows about the policy and has access to the policy number and insurer’s contact details. Keep documents in a place they can easily find.

Tax Benefits for NRIs

Here’s how taxes work for NRI term insurance:

Section 80C deduction: If you have taxable income in India, premiums paid (up to Rs 1.5 lakh) qualify for deduction
Section 10(10D) exemption: The death benefit paid to your nominee is completely tax-free in India
GST: From September 2025, GST on individual life insurance policies has been exempted, making term insurance even more affordable

If you’re paying premiums from an NRE account: You may be eligible for an 18% GST refund by providing your Tax Residency Certificate and other documents. Check with your insurer about this.

For a deeper understanding of ITR filing for NRIs, that guide covers everything you need to know.

Common Mistakes NRIs Make with Term Insurance

I’ve seen these mistakes too many times in our community. Please avoid them:

Underinsuring to save on premium. A Rs 50 lakh cover might seem enough, but factor in inflation, your family’s lifestyle, and future expenses. Going for Rs 1 crore or higher is often wiser.
Not disclosing pre-existing conditions. This is the #1 reason for claim rejection. Be completely honest about your health history. It might increase your premium slightly, but it ensures your claim won’t be denied.
Choosing based on premium alone. The cheapest plan isn’t always the best. Consider claim settlement ratio, insurer reputation, and customer service quality.
Not updating the insurer about status changes. If you move countries or return to India, inform your insurer. Keeping records updated prevents issues during claims.
Forgetting to inform nominees. Your family should know about your policy. Share the policy number, insurer contact, and where documents are stored.
Letting the policy lapse. Set up auto-pay for premiums. A lapsed policy means no coverage and potentially lost premiums.

Frequently Asked Questions

Can I buy term insurance from India if I’m in the US?

Yes, absolutely.

Most major Indian insurers offer NRI term plans that you can purchase entirely online. You’ll need to complete a video medical examination (VMER) from your location, and premium payments can be made through NRE/NRO accounts or international cards.

What happens to my NRI policy when I return to India permanently?

Your policy continues as usual.

Simply inform the insurer about your change of residential status and update your address. You may need to switch your premium payment from an NRE account to a regular Indian savings account. Coverage remains unaffected.

Is there a GST benefit for NRIs on term insurance?

Yes.

From September 2025, GST on individual life insurance policies has been exempted. Additionally, NRIs paying from NRE accounts in foreign currency may be eligible for GST refunds by providing required documentation like Tax Residency Certificate.

Can OCI holders buy term insurance in India?

Yes, Overseas Citizens of India (OCI) and Persons of Indian Origin (PIO) can purchase term insurance from Indian insurers, provided they meet the eligibility criteria.

The process is similar to NRIs with Indian passports.

Do I need to visit India to buy term insurance?

No.

The entire process – application, KYC, medical examination, and payment – can be completed remotely. Video medical exams (VMER) have made physical presence in India unnecessary.

What if the policyholder passes away outside India?

The claim process remains the same.

The death certificate needs to be attested by the Indian Embassy or Consulate in that country. Once submitted along with other required documents, the insurer processes the claim and pays the nominee in India.

How much coverage should I buy?

A general rule is 10-15 times your annual income.

Factor in outstanding debts, children’s education costs, spouse’s financial needs, and how many years of income replacement your family would need. Use online calculators to get a personalized estimate.

My Recommendation

If you’re an NRI considering term insurance, here’s my practical advice:

Don’t delay. Premiums only get higher with age. Buy now and lock in lower rates.
Go with high CSR insurers. HDFC Life, Max Life, ICICI Prudential, and Tata AIA are all solid choices with 99%+ claim settlement ratios.
Buy enough coverage. Rs 1 crore might sound like a lot, but it’s often just adequate for families with kids and loans.
Add critical illness rider if budget allows. It provides financial cushion if you’re diagnosed with a serious illness.
Keep your nominee informed. The policy is useless if your family doesn’t know about it when they need it.

Term insurance isn’t exciting.

Nobody likes thinking about death or worst-case scenarios.

But having that safety net in place gives you peace of mind – and that’s worth a lot when you’re thousands of miles away from family.

If you’re planning your move back or have already returned, this is one of those things worth getting right. Your future self – and more importantly, your family – will thank you for it.

Have questions about term insurance or planning your move back to India?

Join our WhatsApp community at https://backtoindia.com/groups – 20,000+ NRIs helping each other with real, lived experience. It’s free and volunteer-run. 💬

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Disclaimer: This article is for informational purposes only and should not be considered financial advice. Insurance regulations, premiums, and claim settlement ratios change over time. Always verify current details with the insurance provider directly and consult with a qualified financial advisor before making any insurance decisions. BacktoIndia.com is not affiliated with any insurance company mentioned in this article.

Best Term Insurance Plans for NRIs in India