Life insurance has become a basic necessity for most people. Amid the uncertainties of life and the increasing awareness of life insurance, many people are now acknowledging the importance of life insurance.
Indian life insurance for NRIs in Singapore can be a meaningful choice for many reasons. Read on as we discuss the reasons behind it:
Premium Cost vs Singapore Policies
One of the major concerns while buying a life insurance policy is the premium cost. Indian life insurance plans are comparatively more affordable for NRIs in Singapore. Wondering how? Let's understand.
The difference between the Singapore Dollar and the Indian Rupee is significant. Singapore Dollar is stronger than the Indian Rupee (INR). Since insurance plans in India are INR denominated, the premiums prove affordable for NRIs earning in Singapore Dollars.
Claim Support System in India
Under the Foreign Exchange Management Act (FEMA), Non-Resident Indians (NRIs) are permitted to purchase life insurance policies in India. This provision enables NRIs to secure financial protection for their families, regardless of their country of residence.
The Insurance Regulatory and Development Authority of India (IRDAI) serves as the apex regulatory body for the insurance sector in India. IRDAI ensures that insurance companies operate transparently, ethically, and in the best interests of policyholders. It monitors solvency margins, enforces fair claim settlement practices, and mandates public disclosure of claim settlement ratios to promote accountability
As a result, the claim support system in India is robust and responsive. Insurance companies are required to resolve customer queries and grievances promptly, thereby minimizing inconvenience and enhancing trust in the system
If you have family back home, your nominee can file a claim with the Indian insurer easily in the case of your demise. The insurance company would process the claim and settle it at the earliest so that your family in India can get the death benefit when needed. Moreover, the death benefit is paid in INR which makes it easier for your family to use the benefits immediately without the added step of currency conversion.
Digital Onboarding from Singapore
Indian life insurance products are not only affordable in terms of premium, but also because of digital onboarding. As an NRI in Singapore, you do not necessarily have to visit India to purchase a life insurance policy. NRIs in Singapore can purchase Indian life insurance online from the comfort of their residence or office in Singapore.
To purchase the policy, you need to fill out and submit the proposal form online on the official website of your chosen insurance provider. You will also have to attach documents as required by the insurer, including a medical check-up report. You may be required to undergo a medical check-up in Singapore itself and send the reports online to your insurer.
This digital comfort of purchasing life insurance breaks the barrier of geographical distances. Now, you can purchase Indian life insurance from anywhere in the world.
Multiple Types of Life Insurance Plans
NRIs in Singapore can choose from a range of life insurance plans. Some of the most popular options are:
Endowment Plans
Endowment plans offer both life insurance and savings. Along with the assurance of coverage, they provide a payout on maturity, making them ideal for long-term financial goals like education, marriage, or retirement.
Term Plans
These are pure life insurance plans with no savings element. At affordable premiums, you can get access to a comprehensive sum assured .
Money-back Plans
In this type of life insurance plan, you get regular payouts during the policy term along with life insurance coverage. This helps in creating liquidity.
Child Insurance Plan
Get life insurance and build a secure financial corpus for your child with a child insurance plan. The policy secures the financial future of the child even if the parent is no longer around.
Tax Benefits in India
Apart from the aforementioned reasons, you can also avail yourself of various tax benefits by purchasing Indian life insurance policies. Take a look:
- NRIs in Singapore can waive off the GST subject to eligibility criteria and submission of documents every year that is charged on the life insurance products. If the premium payment for the life insurance is done through an NRE (Non-Resident External) account
- Section 80C of the Income Tax Act of 1961 lets you avail tax deductions of up to ₹1.5 lakhs against the premiums that are paid
- Section 10(10D) of the Income Tax Act of 1961 makes the maturity benefit tax-free, subject to specific conditions.
- The death benefit is always tax-free.
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