1. I have changed my country as an NRI, what happens to my ULIPs?

If you change your country, typically, nothing changes in your ULIPs. However, there might be certain restrictions for NRIs in some countries, or a change in the premium. Make sure to inform your insurer.

2. As a NRI, Do I have to pay any additional charges for ULIPs?

No, as an NRI, you do not have to pay any additional charges. Just like for residents, ULIPS for NRIs also come with certain like premium allocation, fund management charges etc.

3. Can I switch funds under ULIPS?

Typically, ULIPs allow you to switch funds , which may come along with fund-switching charges. However, there might be restrictions on the number of times you can switch funds which may differ from plan to plan and insurer to insurer.

4. What are the tax benefits for NRIs under ULIPs?

NRIs can enjoy tax benefits for investments made towards ULIPs. In case of the death of the insured during the tenure of the ULIP, the appointed nominee receives the death benefit, which is tax-free as per Section 10(10D) subject to conditions. The premium paid towards ULIPs is also tax-free under section 80C of the Income Tax Act. However, returns that you receive would be taxable as per the Long-Term Capital Gains (LTCG) tax rate

5. Are NRIs in Oman eligible to buy ULIPs from Indian insurers?

Yes, NRIs who live in Oman can buy ULIPs from Indian insurers subject to compliance with applicable regulations such as the Foreign Exchange Management Act (FEMA) and other relevant guidelines, including KYC norms.. Most insurance companies let you sign up online and pay towards your ULIPs through an NRE or NRO account.

6. How are premiums for ULIPs paid by NRIs residing in Oman?

You can pay premiums in India with either an NRE or NRO bank account. Some insurance companies also accept credit cards from other countries or accept online remittances.

ULIPs for NRIs in Oman: Benefits, How to Buy & Tax Insights

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An ideal combination of investment and insurance

Under a single policy, you can get the benefits of life coverage as well as market-linked investments. Without the worry of juggling between your separate investments and insurance policies, you can enjoy them both under one umbrella.

Stay empowered with asset allocation

ULIPS allow you the freedom to allocate the funds that you invest into various market-linked instruments. You can invest in debt funds, equity funds and even a balanced combination of both. As an NRI, this can be very beneficial for you, especially when you may have different priorities when living abroad.

Build your wealth with market-linked growth

NRI investors can also use ULIP as a tool to build wealth. If the market allows, you can benefit from long-term market-linked growth. While markets always come with the risk of volatility, you can make use of diversification to secure your financial stability.

Switch funds when you deem it right

Another benefit that ULIPS bring is fund switching. Changing market conditions or your personal financial situation can be dealt with through careful fund switching. Keep monitoring your portfolio and choose the option to switch when it seems right.

Meet your liquidity needs in India or abroad

Once the 5-year lock-in period is over, you have the option of making partial withdrawals. Depending on your needs in India or abroad, you can make use of this money.

Tax benefits are an added advantage

Life insurance policies offer tax benefits, which can be a major attraction if you wish to save on taxes back home. As an NRI in Oman, you can get tax benefits on ULIPS at the time of policy inception, on the returns that you get and when the plan comes to an end. Here’s how:

Section 80C of Income Tax Act, 1961 (under old tax regime) allows a deduction of up to Rs.1.5 lakhs per year against the premiums you pay.
The returns that you receive during the policy are not taxed as long as you stay invested. You can enjoy tax-free growth.
In case of the death of the insured, the death benefit received by the nominee is tax-free under Section 10(10D).

Disciplined savings for a secure future

No matter what part of the world you reside in, the hope of a secure future remains. As an NRI in Oman, if you are planning to stay on, buy a house or plan your retirement there, the wealth accumulation through the ULIP can be very helpful in arranging your finances.

A lot of NRIs in Oman also dream of returning home someday, either for good or during their retirement. When you have a significant corpus to rely on, coming back and settling well becomes easier.

ULIP performance depends on the underlying funds you choose and how those funds perform in the market over time. It is, therefore, quite essential that you analyse your risk appetite and only then venture into the market.

NRIs in Oman can pay the premiums through direct bank transfers using NRE or NRO bank accounts in the form of SWIFT transactions or through Foreign Bank account via SWIFT transactions.

There are various types of fees and charges that are associated with ULIPS. As an NRI in Oman, you should well-acquaint yourself with charges such as:

Fund Management Charges
Mortality Charges
Policy Administration Charges
Premium Allocation Charges
Partial Withdrawal Charges
Fund Switching Charges
Miscellaneous Charges

When your ULIP comes to an end, you may be able to get some tax benefits. However, make sure of the following:

If you bought the ULIP after April 1, 2012, your annual premium should not be more than 10% of the sum assured.
If you bought it before April 1, 2012, the premium limit is 20% of the sum assured.
As per the 2021 Budget, if the total premiums of all ULIPS bought on or after February 1, 2021, go over ₹2.5 lakhs in a year, the maturity amount will be taxable.
If your returns from equity-oriented funds are above ₹1 lakh, they’ll be taxed at 10% (Long-Term Capital Gains tax).
For non-equity funds, returns over ₹1 lakh may be taxed at 20%.
NRIs should also check the tax rules between India and their country of residence, the Double Taxation Avoidance Agreement (DTAA), to fully understand the tax impact.