Types of Life Insurance Plans
Life insurance plans cater to the different financial and life insurance needs of individuals. However, to choose the policy that best suits your financial needs, it is essential to understand what each one stands for. Here is a brief explanation of some of the different types of life insurance plans available, for quick understanding:
Term Insurance Plan
A term insurance is a pure life insurance policy that provides coverage for a specified term. With an affordable premium, you can get optimal coverage that suits your needs.
During the policy's tenure, the nominee is eligible to receive the death benefit if the life assured passes away during the policy term. However, on maturity, no benefits are usually paid unless you choose the return of premium term insurance plans. Under such plans, the premiums paid are refunded on maturity.
Endowment Plans
Endowment plans combine savings and life insurance. This is because, while the policy provides life insurance coverage for the agreed-upon tenure, it also offers a benefit upon the plan's maturity. The nominee receives the death benefit if the life assured passes away during the tenure. However, if they survive, they receive a maturity benefit.
Endowment policies can also offer additional benefits, such as bonuses, if declared, guaranteed* additions, and loyalty additions.
Whole Life Insurance
A whole life insurance policy may include savings features as well as life insurance coverage. It provides life coverage for whole life, typically up to 99 or 100 years of age. The nominee receives the death benefit upon the life assured's passing away. If the assured survives the tenure, a maturity benefit is paid.
Annuity Plans
If you are looking for life insurance that also supports you during the retirement phase, retirement plans such as annuity plans can be a good choice. It provides a regular income after retirement while also protecting your life against unforeseen events.
Child Insurance Plan
Securing your child's financial future is a major concern for any parent. With a child's plan, you can provide this much-needed protection to your kids. The policy secures the financial needs of the child, like education. These plans often include an inbuilt waiver of premium, where, if the parent passes away, the insurer pays the upcoming premiums, and the policy continues.
Steps to Purchase Indian Life Insurance From Kuwait
If you are an NRI in Kuwait and wish to purchase life insurance in India, you can do so without any difficulty. You may either purchase a policy when you visit India or entirely online from Kuwait. Here are the steps you need to follow:
Step 1: Choose the Plan Type
The first step is to choose the right life insurance plan. Assess the different types of plans described online and choose those that align with your financial goals.
Once you have decided on the type of life insurance, proceed with the online application. If you are in India, you may also choose an offline method by visiting a nearby office of your insurer.
Step 2: Submit Documents Digitally
The application form for the life insurance policy also requires you to submit certain documents. Depending on the life insurance company, the documents may differ. However, common documents that are usually asked for are identity proof, address proof, medical records, proof of NRI status, etc.
Step 3: Complete Medicals
To purchase a life insurance policy, you might have to submit medical examination records to your insurer. If you are in Kuwait, you can get the medical examination done in Kuwait and send the records digitally to the insurance company in India. In this case, the cost of the medical examination must be borne by the applicant. There is a telemedical facility too, which the insurance company might offer for convenient check-ups. Alternatively, if you are visiting India, you can get the check-ups at an authorised Indian facility too.
Step 4: Confirm Policy Terms
Before you finalise a life insurance policy, it is essential to go through the policy terms and documents. Double-check the sum assured, premium amount, policy term, premium payment term and frequency, any riders that you have opted for, etc.
Make sure to understand the exclusions of the policy. In case of any confusion, you may ask your insurer or seek professional help.
Step 5: Payment Options for NRIs
Ultimately, the underwriting review the proposal. If the proposal is accepted you need to make the premium payment. To make the payment, you may use the NRE (Non-Resident External), NRO (Non-Resident Ordinary) accounts, international credit cards, as well as foreign bank accounts or swift transactions.
Remember that the payments are to be made in INR.
Conclusion
As an NRI in Kuwait, you can secure your and your family’s future with the available life insurance solutions back home. Whether you plan to stay in Kuwait or return to India after a specific period, life insurance plans can cater to your and your family’s financial needs.
So, assess the different types of plans, choose the right plan, complete the purchase process and secure your finances effectively.
FAQs
Are there tax benefits in India for life insurance purchases?
Yes. Life insurance premiums are eligible for tax benefits. The benefits are extended to NRIs in Kuwait also. You can claim tax deductions of up to ₹1.5 lakhs under Section 80C of the Income Tax Act of 1961.
Can you purchase life insurance in India without being physically present?
Yes. As an NRI in Kuwait, you can purchase life insurance from Kuwait without physically being present in India. However, in this case, you will have to bear the cost of a medical examination done in Kuwait. The medical reports of the applicant are required to purchase the policy.
Is GST charged on purchasing Indian life insurance?
If you are paying the premium for life insurance using an NRE account, GST can be waived off subject to eligibility criteria and submission of documents every year. This waiver of GST a reduce the overall cost which is subject to eligibility criteria and submission of documents every year.
