Best Life Insurance Options for Returning NRIs in the UK

Life insurance options for returning NRIs

Given below are the various financial goals that you, as a returning NRI, might have, and the life insurance solutions for each one of them.

1. Goal - Income replacement

   If you are the sole or primary breadwinner of your family, your absence might cause a considerable financial strain for your family members. As such, you need to create a provision for replacing your income if you were not around.

   
   

   Life insurance solution – Term insurance

   A term insurance plan can be a good fit in this scenario. A protection-oriented life insurance plan, term plans cover the risk of death during the policy tenure. If you pass away unexpectedly, the term insurance policy would pay a death l benefit to your family to replace the lost income.

   Term plans are affordable and allow you to choose a suitable sum assured that can provide the family with the desired corpus. You can buy the plans online or offline in a few simple steps.

   
   

2. Goal – Corpus creation

   Child’s higher education, buying a home, or fulfilling any other financial goal requires a corpus at your disposal. If you are returning to India, you might look for suitable avenues to save and create the corpus that you need.

   
   

   Life insurance solution – Savings and investment-oriented plans

   For creating savings for your goals, traditional savings plans, like endowment and money back plans, or market-linked life insurance plans like ULIPs, can come to your aid. These plans combine the benefit of life insurance protection with corpus creation. While traditional savings plans offer stability without exposing your savings to market volatility, ULIPs offer market-linked returns.

   You can choose a suitable plan depending on your goals, risk appetite, and investment strategy. Choose a tenure that aligns with the goal for which you want to save. For instance, if you aim to buy a home in the near future, choose shorter tenures. However, for planning for your child’s future, long-term plans can be a suitable choice.

   
   

3. Goal - Retirement planning

   Retirement is that phase of life when you stop working actively. You look at a relaxed lifestyle when most of your goals are taken care of.

   That being said, retirement is also the time when you might not have a stable source of income and need to plan for your lifestyle and medical expenses.

   
   

   Life insurance solution – Annuity plans:

   Annuity plans are specifically designed for retirement planning. You can choose from two types of plans – deferred and immediate annuity.

   1. Deferred annuity plans are meant to create a retirement corpus if you have time on your hands before you retire.
   2. Immediate annuity plans are meant to create a regular source of income after retirement. They are suitable if you have a retirement corpus at hand, which you want to invest and generate a steady flow of annuities. So, if you are nearing retirement and returning to India to spend your golden years, you can choose immediate annuity plans and secure a lifelong annuity income.
      
      

Choosing right

While life insurance plans can give returning NRIs the financial means to plan for their goals, the right choice of a plan is essential. So, assess your coverage needs and then choose a plan that meet your requirements.

Once you choose the right plan, you can buy it online from the UK, before you return, or after returning to India. Here are some points to keep in mind –

1. Specify your NRI status when buying the life insurance policy from India
2. You can buy the policy online from the UK in some simple steps. Follow the online process and buy the policy virtually.
3. Premiums can be paid from your NRE/NRO account, swift transactions or through wire transfers.
4. You might have to undergo medical check-ups when buying the policy. You can get the check-ups done in the UK, when in India, or virtually through the telemedical facility, too.
5. Specific documents would be needed to complete the policy purchase. Check the required list of documents when buying the policy and ensure they are handy.
    

Conclusion

For NRIs returning from the UK, life insurance can add to your financial planning strategy by providing life coverage and savings. Whether you are looking for income replacement, retirement planning, or creating a corpus, the different types of life insurance plans can cater to every need.

So, assess your financial needs and make an informed choice to enjoy the benefits that life insurance plans have to offer.

FAQs

1. What would happen to my policy bought in India if I return to the UK later on?

   Your policy would run unaffected even if you return to the UK². However, you should inform the insurance company of a change in residential address and comply with the FEMA guidelines to enjoy the coverage without disruptions.

   
   

2. Will my NRI status affect the premiums payable for life insurance plans in India?

   Premiums for NRIs are usually similar to premiums charged from resident Indians². However, if your country of residence, in this case the country, is considered as ‘high-risk’, the insurer might increase the premiums².