Premium Payment Options for NRIs

Types of Premium Payment Available for NRIs

Here’s a list of some of the most popular payment options for NRIs that are simple and secure:

 

1. Credit/Debit Card (Online Payment)

This is one of the simplest NRI premium payment options to pay for an NRI term insurance or life insurance. You should link your VISA, Mastercard, or Amex credit/debit card to the insurer’s portal to make the transfer. Once the card is activated, you need to enter your PIN to make a secure payment.

 

2. Internet Banking Transfer

NRIs usually have 2 types of accounts – Non-Residential External (NRE) and Non-Residential Ordinary (NRO) accounts. While an NRO account stores earnings made in India, an NRE account is used to accumulate foreign income and enjoys tax exemptions. You can sign in to any of these accounts and use the safe world of internet banking to make the necessary remittance.

 

3. SWIFT Transfer from Foreign Bank Account

Payments for NRI investment plans  in India can be made via a foreign bank account, too. You just need to initiate an electronic transfer via the SWIFT network. Currently, SWIFT transfers are available in more than 13 currencies, including the Indian Rupee. You should confirm with your bank that the SWIFT facility is enabled for INR transfers.

 

4. Cheque Payment

One of the most conventional premium payment options for NRIs is by making a deposit through a cheque. Most insurers in India accept cheque payments made from the policyholder’s NRE, NRO, or Foreign Currency Non-Resident (FCNR) accounts. You can just submit a cheque from any of these accounts to clear your due premiums.

 

Things NRIs Should Keep in Mind Before Paying Premiums

Whether choosing retirement planning for NRIs or buying NRI life insurance, keeping a few essentials in mind will ensure the entire process is smooth and hassle-free. 

 

1. Maintain updated contact & KYC details.

For KYC, NRIs are expected to provide their passport, proof of foreign address, income-related documents, photographs, and OCI/PIO card, if applicable. Always ensure that your phone number and e-mail ID are correct in the documents to get timely updates regarding the plans and reminders to pay premiums on time.

 

2. Ensure compliance with FEMA & local country tax laws.

When paying premiums for any term plan, you should review NRI taxation in India and your resident country to ensure that it abides by the FEMA guidelines. While India offers tax-free benefits across various stages of an insurance policy, know about the tax laws abroad to avoid any surprises.

 

3. Exchange rate fluctuations while remitting.

It’s wise to pay premiums in Indian rupees to avoid exchange rate swings. So, you can use an NRO account if you pay in INR. If you go for remittance via foreign currency, it’s best to use your NRE/FCNR account.

 

4. Check insurer-specific NRI premium payment rules.

Payment policy can vary with the insurer. You should check your premium payment frequency and mode, currency option, late payment charges, and any other related information beforehand to ensure a smooth fund transfer.

 

Key Takeaways

1. Timely premium payment of NRI investment plans helps to keep the plan active.
2. Multiple premium payment options for NRIs include credit/debit card, internet banking, SWIFT transfers, or cheque payments.
3. NRE account offers tax savings, while the NRO account is ideal for Indian-based earnings.
4. SWIFT transfer allows payment from foreign accounts.
5. Before paying, check that KYC is updated, know about NRI taxation in India and abroad, and exchange rate swings.
6. It’s best to consult your insurer regarding payment guidelines to avoid any surprises later.

 

Conclusion

NRIs invest in India not only to secure their family’s future, but also to create wealth. For the plans to serve their purpose well, premiums should be paid on time, using any of the available premium payment options for NRI. Knowing about tax rules in India and the resident country, and choosing the right payment method for smooth fund transfer on time, will keep your policy strong to give the desired results.

 

FAQs

 

1. Can NRIs pay premiums using international credit cards?

Yes, NRIs can link their VISA, Mastercard, or Amex international cards to the insurer’s portal to pay premiums smoothly.

 

2. Is it mandatory for NRIs to have an NRE/NRO account to pay premiums?

It is not mandatory to have an NRE/NRO account to pay premiums. You can use FCNR accounts, cheque payments, or SWIFT transfers for remittance. However, NRE/NRO accounts are better choices for the effective management of funds in India.

 

3. Can NRIs claim tax benefits in India on premiums paid?

Yes, NRIs can claim tax deductions up to ₹1.5 lakh on premium payments, under Section 80C of the Indian Income Tax Act.

 

4. Can an NRI’s family in India pay the premium on their behalf?

Yes, an NRI’s family in India may pay the premiums via NRO accounts or a cheque. However, they will need prior approval and linking of payment to the NRI’s plan.

 

5. What happens if an NRI misses a premium payment abroad?

If an NRI missed a premium payment, a grace period is provided by the insurer to pay the amount without penalty. After that, the policy may lapse, and revival will incur extra charges.

 

6. Can premiums be paid in foreign currency directly?

Yes, premiums can be paid via FCNR account or SWIFT transfer. However, it will consider currency conversion as the final transaction needs to be in Indian Rupees.