1. Why is life insurance important?

Life remains unpredictable for everyone. Having a life insurance policy is only helpful as it keeps your family financially stable even during tough times. The right life insurance policy makes sure your family's financial needs are taken care of even when the earning member is no longer around!

2. Can NRIs in Oman opt for riders with life insurance?

Yes. Depending on the types of life insurance policy you choose, you may be eligible for certain riders. Common ones are critical illness rider , premium waiver, accidental death, etc. A rider helps you extend the coverage of your policy to include additional benefits.

3. What are the tax benefits for NRIs in Oman on a life insurance policy?

NRIs in Oman who choose to purchase a life insurance policy in India are eligible for tax benefits as well. Section 80C of the Income Tax Act of 1961 (under the old tax regime) provides tax benefits of up to 1.5 lakhs for NRIs in Oman. However, the policy must be in the name of the NRI, their children, or spouse, and the premium must not be more than 10% of the sum assured amount. Also, the death benefit received by the nominee is tax-free under Section 10(10D), subject to conditions. Under the same section, there are tax benefits that you can avail on the maturity benefit as well.

Life Insurance Plans for NRIs in Oman

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As an NRI in Australia, taking care of your loved ones back at home becomes a priority. Since you cannot always be physically present, purchasing a robust life insurance policy is a smart move. From simple term insurance that is designed for pure protection to policies like unit-linked insurance plans or money-back plans, which are designed to offer a dual benefit of investment and life protection, you have a wide array of options to explore in India. To choose a plan that best suits your requirements and responsibilities, understanding all the available options is the first step.

Here are the different types of life insurance plans in India ^[5] and ^[8]:

1. Term insurance plan

One of the basic life insurance plans that provides coverage for a fixed period. These plans usually don’t offer any maturity benefits, making them more affordable. However, if you choose the refund of premium option, the premiums paid are returned on maturity. Term plans provide life coverage and pay a death benefit if the life assured passes away during the policy term. NRIs in Australia can also buy term plans in India at lower premiums and enjoy the benefit of rupee-based investments while protecting their families.

2. Endowment policy

This is a savings-oriented life insurance plan that covers the risk of premature demise and also has a maturity benefit. If the life assured passes away during the policy term, a death benefit is paid. On the other hand, if the life assured is alive when the policy matures, a maturity benefit is paid.

3. Unit Linked Insurance Plan (ULIP)

This plan offers dual benefits—life insurance coverage and wealth building. Premiums are split between life cover and investment, allowing the policyholder to participate in the financial market and earn market-linked returns. There are also the flexible benefits of partial withdrawals and switching. ULIPs are popular among NRIs, as these plans allow investments in market-linked funds, alongside providing life insurance coverage and tax benefits under Indian tax laws.

4. Money Back Policy

Similar to an endowment policy, but with periodic payouts during the policy term. These survival benefits are distributed over the policy's duration.

5. Whole Life Policy

This insurance policy offers coverage for the life assured's entire life. The policy covers the life assured up to 99 or 100 years of age. In case of death during the coverage term, a death benefit is paid. However, if the life assured survives the tenure, a maturity benefit is paid.

6. Child Plan

Child plans secure a child's financial future and often include an inbuilt premium waiver, where the insurer covers premium payments if the parent passes away, ensuring the plan continues.

7. Annuity

Annuity Plans accumulate premiums as assets and pay them out as regular income (annuity) or a lump sum after retirement, based on the policyholder's preferences.

Purchasing a life insurance plan for NRIs has become much easier with advances in digital technology. The steps below explain how you can buy a policy from India:

Step 1: Visit the insurer’s official life insurance page.

You can purchase a life insurance policy online from anywhere in the world, without having to visit India in person. Simply visit the insurer’s website to begin the process.
Step 2: Provide basic personal details.

Fill in details like your name, date of birth, gender, contact number, current country of residence etc.
Step 3: Submit additional details.

Share information related to smoking habits, occupation, annual income, and education. The insurer may also review the risk level associated with the country of residence, which may affect premiums.
Step 4: Complete medical requirements (if needed)

Medical tests can be conducted at approved centers in Oman, with reports sent directly to the insurer. Some insurers may offer telemedical assessments.
Step 5: Review underwriting decision and proceed with premium payment

After receiving the underwriting decision and final premium details for the selected life insurance plan, you can confirm the terms and make the premium payment. Payments can be made through NRE/NRO/FCNR accounts or permitted foreign remittance options.
Step 6: Receive policy documents and coverage.

After the underwriting approval and successful payment of the premium, the insurer issues the policy documents. Once issued, the life insurance coverage applies worldwide, including Oman, and the policy benefits are payable in the currency specified in the policy document.