GST refund on premiums makes term insurance more attractive for NRIs
A term life insurance plan is the financial preparedness that not only provides peace of mind during one’s lifetime but also serves as the much-needed financial backing for the family in distress. Recognising this crucial need, the insurance industry is continuously striving to make term insurance more appealing and meaningful for NRIs or non-resident Indians.
Since 2021, life insurance companies have been incentivising NRIs to buy term insurance policies by offering them 18 percent goods and services tax (GST) refund on plans bought from India.
This is a key development towards making term plans even more accessible, affordable as well as attractive for NRIs. They may have moved away for better prospects but with their roots in India, they need to secure their families back home, all the more in their absence.
Here are the details and the reasons why NRIs ought to make the best out of it.
Higher savings with GST refund
Eligibility for 18 percent GST refund translates into significant savings in premium paid towards one’s term life insurance policy. To avail of this benefit, the Indian expat or the NRI should buy the policy from their NRE or non-residential external bank account.
The policyholder will also be required to furnish documentary proof like NRE account statement and address proof to be eligible for the refund. Not only this, NRIs will also be eligible for a 5 percent additional discount if the premium is paid annually. With this simple process, they can seamlessly take the important step of securing the future of their families and also get up to 23 percent extra monetary benefit.
Besides, the plans are far more affordable in India compared to the host country. Especially in comparison to developed countries, these plans can be 50-60 percent cheaper than the ones offered in resident countries.
Eligibility for higher cover digitally
In the digital age, buying a term plan has been made far easier and rewarding for potential policyholders across the globe. Previously, they were eligible for a cover amount of up to Rs 3 crore on digital purchase via telemedical examination. Now, they can digitally buy a term cover of up to Rs 5 crore and adequately shield their dependants without having to travel to India.
All they need to do is undergo the telemedical examination, after which, if the healthcare provider clears them, they can proceed with their purchase. A term cover as high as Rs 5 crore not only guarantees financial security but also the capability to beat inflation. It means that your family can continue sustaining the same lifestyle even in your absence. The fact that one can buy it from anywhere in the world digitally just makes it more attractive.
Policies best suited for Indian needs
Term insurance industry in India is innovating at a rapid pace. New-age products like independent homemaker term plan or return of premium at no cost are testament to the fact that products are being tailored to suit every Indian consumer segment.
So even if you decide to move away from India, it doesn’t necessarily mean that you have to compromise on your term insurance needs. Term plans conceived and designed in India are specifically meant to serve Indian consumers, irrespective of where they are.
One can choose from an array of term plans, customise them as per their requirement or add any riders that they are specifically looking for. They can also increase or adjust their cover amount as per family size, liabilities or any other preference.
