Family in India = Constant Financial Priority
Staying in Kuwait, NRIs may continue to juggle their responsibilities of ensuring financial protection for their family back in India. Whether it is for their children's education and marriage expenses, the financial needs of their spouse, or the medical needs of their parents, NRIs in Kuwait are increasingly turning to purchasing life insurance plans in India. Several reasons drive NRIs to purchase a life insurance plan in India, such as:
- Financial protection for their loved ones
- Comprehensive coverage at affordable premiums
- Building wealth for long-term needs through plans like endowment, money back, etc.
- Creating a financial safety net.
- Tax exemptions.
To meet the responsibilities of their families back home, NRIs can choose term insurance plans that provide financial security. Moreover, for planning a corpus for financial goals in India, savings-oriented life insurance plans, like endowment can be a wise choice.
Benefits through Insurance Cum Investment Plans like ULIPs
A life insurance plan for NRIs in Kuwait makes sense, especially when they have access to insurance cum investment plans like ULIPs. Life insurance plans in India are not limited to providing life cover, but also offer market linked investment options.
Additional Benefit of Tax Exemptions
One of the key reasons for NRIs to purchase life insurance in India is the additional benefit of enjoying tax exemptions. Here’s how:
An NRI in Kuwait can claim a GST refund which is subject to eligibility criteria and submission of documents every year for the premium paid towards purchasing a life insurance plan.
- As per Section 80C of the Income Tax Act, 1961, premiums paid towards life insurance policies are allowed as a deduction from taxable income. So, if you have a source of income in India, this section can help you bring down your tax liability.
- The death benefit or maturity benefit received from the life insurance policy also enjoy tax exemption.
Term vs Endowment Plans: What to Choose?
Now that you know the benefits of buying insurance in India, the next question might be which policy to choose. Term and endowment plans might come to the forefront in your consideration.
Both the plans are quite different from one another in terms of their features and benefits. So, let’s understand their aspects so that you can decide which would be a better fit.
Term Insurance Plan
A term insurance plan is a type of life insurance that provides coverage for a specified duration, typically ranging from 5 to 40 years. In the event that the life assured dies during the policy term, the insurer the payout, known as a death benefit, to the nominee . There are various types of term insurance, including decreasing term insurance, increasing term insurance, and return-of-premium term insurance, among others.
A term plan is suitable if you are looking for pure coverage, as a regular term insurance plan does not offer a payout if the life assured survives the policy term.
Why Choose Term Insurance?
- Term insurance typically comes with a comprehensive coverage at low premiums.
- Access to riders enhances coverage
- Through a return of premium plan or TROP plans, the life assured can enjoy maturity benefits on surviving the policy tenure
- Allows tax benefits on the premium you pay and the death benefit received by the nominee.
Did you know? Kuwait, along with other Gulf countries, leads the market for health and term insurance in India, accounting for nearly 60% of the total sales.2
Endowment Plan
An endowment plan is another type of life insurance plan which comes with the additional benefit of savings . Under this type of plan, the insurance company pays a death benefit if the life assured passes away during the policy tenure. If the life assured survives the policy tenure, the insurance company pays a maturity benefit upon policy termination.
Why Choose an Endowment Plan?
- To enjoy the dual benefit of life cover and savings.
- To develop a disciplined routine of savings.
- To create a stable corpus, immune from market risks, for your financial goals.
Quick Comparison: Term vs Endowment Plan
Understanding the differences between a term plan and an endowment plan will help you in making an informed decision:
| Details | Term Insurance Plan | Endowment Plan
|
|---|
Coverage Type
| Pure risk cover
| Risk cover + savings component
|
Payout on Survival
| No (unless the TROP option is chosen)
| Yes: Maturity benefit is paid
|
Premiums
| Lower premiums
| Higher premiums
|
Returns
| No returns
| Assured* returns
|
Who Should Choose
| Those needing comprehensive life cover at low cost
| Those wanting life insurance + savings
|
Life Insurance Online Purchase Process from Kuwait
The ease of purchasing a life insurance plan in India for an NRI in Kuwait is a key factor contributing to the growing demand. Here’s how an NRI in Kuwait can purchase life insurance in India:
Choose the Right Plan
First, compare and evaluate different types of life insurance plans available. You can assess your financial needs, short-term and long-term goals, and the requirements of your loved ones to find a plan tailored to your needs.
Keep Documents Ready
Purchasing a life insurance plan in India requires you to submit certain documents like identity proof, proof of residence in your resident country, etc. Ensure that you check the required document list for the respective insurance company.
Make an Online Application
Visit the official website of the respective insurance company, complete the application form with the required details, and submit the necessary documents.
Confirm the Purchase with Payment
To confirm the purchase, wait for approval confirmation from the Insurer on the proposal form, once approved you can easily make an online payment using either your non-resident external (NRE) or non-resident ordinary (NRO) account or through swift transactions.
Conclusion
Purchasing a life insurance plan in India is a step you take to safeguard the needs of your loved ones, build a sizable corpus for your long-term financial needs, and enjoy peace of mind that even when you are not around, your loved ones can easily meet their lifestyle expenses.
If you haven’t purchased a life insurance plan yet, this is your reminder to safeguard the financial needs of your loved ones back in India.
FAQs
How can an NRI in Kuwait pay for life insurance plans in India?
An NRI in Kuwait can seamlessly pay for life insurance plans in India using their Non-Resident External (NRE) or Non-Resident Ordinary (NRO) account or through swift transactions. Payments made through NRE accounts also allow GST exemption which is subject to eligibility criteria and submission of documents every year.
As an NRI in Kuwait, why should I purchase life insurance in India?
As an NRI in Kuwait, purchasing life insurance in India comes with multiple benefits like financial protection for dependents in India, tax exemptions, affordable premiums and a lot more.
