Non-resident Indians (NRIs) may struggle to plan for their financial future while juggling global commitments. Term insurance is an often-overlooked characteristic. Many NRIs enquire, “Do I need a term insurance plan?” The answer is an unequivocal yes.
A term insurance policy is a simple and cost-effective way to protect your family’s future, whether you live abroad or want to return. Let’s look at why NRIs should consider term insurance plans and how they may benefit from this simple yet efficient financial tool.
Reasons Why NRIs Must Consider Term Insurance
- Financial security for family
NRIs often have close family members living. A term insurance plan ensures that if anything happens to you, the financial future of your family is secure. The compensation received from the term insurance policy can be used for their basic needs, children’s education, and other responsibilities.
- Cost-effective premiums
Term insurance for NRI is relatively affordable compared to plans in many other countries. Since the rates are comparatively lower and the options are much wider, it makes more sense for an NRI to go for a plan from India instead of getting an insurance policy from another country.
- Currency advantage
Most NRIs operate in foreign currencies and buying a term insurance plan in Indian Rupees (INR) is a good buy. The cost may seem small because of the exchange rates, which enable you to obtain valuable coverage with a relatively small amount of money.
- Tax benefits under laws
Like ordinary Indian citizens, NRIs can also get tax deductions on the premiums paid under section 80C of the Income Tax Act. This makes term insurance a tax-efficient way of cutting on the taxable income besides being a way of getting covered.
- Coverage against critical illnesses
Several term insurance policies for NRIs come with additional optional benefits, such as critical illness benefits. This pays a fixed amount in the event of major illnesses, and you can use the money to pay for your bills without having to drain your wallet.
- Customisable plans
NRIs can avail of term insurance that is highly flexible in terms of its offerings. You can alter it depending on your requirements ranging from coverage amount, tenure of the policy, or even extra benefits like accidental death or disability. These options also help to simplify the process of choosing coverage by your life cycle and financial plans.
- Peace of mind during uncertain times
The COVID-19 pandemic has taught the world that anything is possible in life. Term insurance secures your family against future mishappens and provides you with a tension-free living wherever you are.
- Ease of buying policies online
NRIs can easily purchase term insurance plans online without the hassle of visiting insurance offices in India. Many insurance companies have streamlined the process, allowing NRIs to get coverage without any geographical limitations.
- Long-term planning for children’s future
For those who have children studying or living, term insurance plan can play an important role in the financial planning of their future. The policy guarantees your children’s education and other future needs are catered for even when you are no longer around.
- Estate planning and wealth transfer
Term insurance is very useful in estate planning and preparation. If you are an NRI with properties in India, the death benefit received from a term insurance plan will offer a helping hand to your family as they seek to cover all the related expenses and pass on the wealth rightfully.
- No medical tests in some plans
Several term insurance policies for NRIs offer the option to get covered without having to take a medical exam based on the sum assured. This makes the process easier and more efficient for those who wish to secure coverage as soon as possible.
- Protection against rising inflation
Inflation has an impact on all the people in the world, and NRIs are no exception to this fact. A term insurance plan can offer your family protection against the increasing cost of living expenses. This way, they are assured of adequate money to address other costs as frequent savings are consumed by inflation.
- India-specific risks covered
Your family residing in India may be exposed to India-related risks such as natural calamities or accidents. A term insurance plan offers the best solution in this regard as it takes into consideration the issues facing families.
- Global coverage, Indian roots
Some of the term insurance plans come with worldwide coverage and this means that even if you are living in another country, the policy will still hold. This means that you are protected regardless of your location, without having to purchase policies in different countries.
- Building a stronger financial portfolio
The implication of having a term insurance plan is that it enhances your financial portfolio. It offers a cushion in case something happens to you, your investment, or your savings to ensure that you can meet your financial obligations in your absence.
Ending note
NRIs sometimes must juggle their financial life across different nations, but one thing they should never sacrifice is the financial security of their loved ones in India. A term insurance plan is a straightforward and cost-effective solution to insure your family’s future.
With advantages like as cheaper premiums, tax savings, various coverage options, and worldwide validity, term insurance for NRIs is an important part of a well-rounded financial strategy. It’s more than simply life insurance; it’s about peace of mind, knowing that your loved ones will be financially secure no matter what life throws at you.
