1. Can an NRI in the UK purchase a life insurance plan in India without a physical visit?

Yes, an NRI in the UK can purchase a life insurance plan in India without a physical visit. There are many life insurance companies that have simplified the process by providing a user-friendly online portal to explore plans, complete online verification and make payment securely.

2. Do I need to open a special bank account to buy life insurance as an NRI?

Yes, for an NRI to buy a life insurance plan in India, it is mandatory to open either an NRE account or an NRO account. Remember that many life insurance companies are now allowing a simple net banking option for making payments that you can explore.

3. Why should an NRI opt for life insurance plans in India?

Opting for a life insurance plan in India as an NRI comes with multiple benefits like a safety net for loved ones back at home, affordable premiums, seamless verification etc.

4. Are there any tax benefits for NRIs purchasing life insurance plans?

Yes, an NRI can enjoy tax benefits under the Income Tax Act. For instance, premiums paid up to Rs. 1.5 lakhs in a year, towards a life insurance plan, are tax-free under section 80C under old tax regime. The death benefits are also free from tax liabilities as per section 10(10D) of the Income Tax Act . Under the same section, you may also be able to get some tax exemptions on the maturity benefits.

5. Why should an NRI opt for riders with a life insurance policy?

Riders help you enhance the coverage of your existing policy at a nominal charge. You can opt for a critical illness rider, accidental death benefit , premium waiver, etc, which are offered by most insurers.

Life Insurance Plans for NRIs in UK

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As an NRI in the UK, a life insurance plan in India has emerged as a promising purchase that ensures they take care of their loved one regardless of the distance. Over the years, life insurance plans in India have evolved significantly to offer benefits and coverage that meet modern-day needs.

Living in a distant country, finding a life insurance plan in India can seem daunting at first. The first step is to explore the wide array of options, ranging from term insurance to ULIPs, and then purchasing a plan that best suits your personal needs.

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 the UK 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 cover 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/Pension Plan

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

Buying a life insurance plan for NRIs in the UK is a straightforward and structured process that enables you to protect your family in India while you reside abroad. Here’s how you can complete the entire process digitally:

Step 1 – Compare and Choose the Right Policy.

Identify your financial goals, such as financial protection, savings, or market-linked investment. Compare different plans, such as term, endowment, and ULIP plans, offered by Indian insurers. Focus on plans that provide global coverage and affordable premiums.

Step 2 – Verify NRI Eligibility.

Before applying, confirm that your residency and nationality meet the insurer’s eligibility criteria. Most Indian insurers accept applications from NRIs, Overseas Citizens of India (OCIs), and Persons of Indian Origin (PIOs) residing in the UK.

Step 3 – Prepare Required Documents.

Gather the essential identification and financial documents requested by the insurer. This includes submitting a duly filled proposal/application form along with the required declarations. Medical information or examination reports must also be provided if requested during the underwriting process.

Step 4: Complete medical requirements (if needed)

Medical tests can be conducted at approved centers in the UK, with reports sent directly to the insurer. Some insurers may offer telemedical assessments.

Step 5: Review the underwriting decision and proceed with the 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 Confirmation.

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 UK, and the policy benefits are payable in the currency specified in the policy document.