Protecting Both Homes: Australia and India - Life Insurance Strategy

Smart types covered in Life Insurance for financial independence

There are different types of life insurance plans available for NRIs living in Australia. Using these plans, you can create a smart financial strategy for all your major goals. Let’s explore some types covered for a better understanding –

 

Paying Liabilities

Even though you live in Australia, you might have liabilities back home. For instance, you might have availed of a home loan to buy a property for your family in India. Alternatively, if you have just moved to Australia, you might have an ongoing financial liabilities in India.

If you have financial liabilities back home, it is important for you to make provision for its repayment. In the case of your premature demise, the burden of this might fall on your family’s shoulders, creating a financial strain.

This is where you need a term life insurance plan. A term insurance plan is a protection-oriented life insurance plan which helps you create a financial cushion for your family in your absence. In the case of your premature demise, your family can use the death benefit to pay off any existing liability.

 

Creating a corpus for your parents

You might be living in Australia, but if your parents are financially dependent on you they might incur considerable financial strain in your absence. Plus, you might want to create a lump sum corpus for their financial needs.

To cater to this need, a term insurance plan again proves useful. The coverage offered by the plan can give your parents financial security. Besides term plans, you can choose savings-oriented traditional life insurance plans, like endowment or money back plans. These plans add the benefit of insurance coverage along witrh creating a stable corpus .

 

Creating a corpus for your family

Your spouse might be planning to buy their dream home in Australia, or you might want to save up for your children’s higher education. For these needs, you need savings-oriented life insurance plans, which can help you save up for your family’s financial goals.

While endowment and money back plans can help you build a stable corpus, life insurance plans like ULIPs can give you the advantage of exposure in the Indian markets through market linked investments. You can invest a part of your premium in market-linked funds and get (potential) wealth creation to build up a corpus for your financial needs. The life insurance coverage provides financial security.

 

Why buying life insurance in India is worthwhile

The strategies help you provide for your family’s financial needs and protect your loved ones both in Australia and India.

Buying life insurance from India has multiple benefits. Wondering what the benefits are? Read on –

 

• Different plans for different needs

  There are different types of life insurance plans available in India. You can choose from protection-centric term plans or savings-oriented like endowment plans and market linked life insurance plans like ULIPs. There are goal-specific plans, too, like child plans, annuity plans, etc., that help you plan for your specific goals.

  You can assess and choose a plan that matches your strategy and covers all your needs.

  
  

• Lower premiums

  Usually, the premiums payable for life insurance plans in India are lower than the premiums payable for international plans¹.

  
  

• Ease of purchase

  As an NRI, you can buy life insurance plans from India online. You don’t have to be physically present, making the buying process easy, convenient, and accessible.

  
  

• Tax benefits

  For NRIs having tax liability in India, life insurance plans can offer attractive tax benefits. The premiums paid qualify as a deduction under Section 80C, which can lower your tax liability². Moreover, the policy benefits are also tax-free^2, allowing you to create a tax-efficient corpus for your and your family’s needs.

  
  

Conclusion

Protecting the needs of your loved ones back at home and ensuring a safety net for yourself in Australia is not very challenging if you use life insurance plans wisely. With the right strategy that combines protection for both your homes, you can give financial security to your loved ones and also enjoy a stress-free future for yourself.

 

FAQs

1. Why should an NRI purchase insurance plans in India?

   An NRI can consider purchasing insurance plans in India to protect the interests of their loved ones back at home. Additionally, purchasing a life insurance plan as an NRI can offer benefits, such as a waiver of GST on premiums (subject to eligibility conditions and submission of necessary required documents every year).³

   
   

2. What is a better option between an insurance plan in Australia and an insurance plan in India for an NRI?

   The better option between an insurance plan in Australia and India depends on several factors including your residency status, financial goals, family location, and long-term plans, among others. As an NRI living in Australia, it is advised to opt for a combined approach of purchasing insurance plans in India and Australia. For instance, to build a life cover, a life insurance plan in India is a reliable option, to cover family living in India or future needs.. A plan in Australia for covering immediate needs and dependents residing locally.