NRI Term Insurance: Myths vs Facts

Elevated Magazines
Aug 7
3 min read

Term insurance is one of the best ways to protect your family’s future. But if you are an NRI (Non-Resident Indian), you may have many doubts about buying it. Some people think it’s too hard. Others think they can’t get it because they live abroad. These are common myths.

Let’s clear all your doubts today.

This blog will help you understand the truth about NRI term insurance. We’ll bust the myths, explain the facts, and make it easy for you.

What Is NRI Term Insurance?

NRI term insurance is a life insurance plan for Indians who live outside India. If something happens to you, the insurance company gives money (called the “sum assured”) to your family. This money helps them take care of expenses, loans, or any other needs.

Whether you live in Canada, the USA, the UK, or any other country, you can still buy a term plan from an Indian insurance company.

Myth 1: NRIs cannot Buy Term Insurance from India

Fact: NRIs can buy term insurance from Indian companies.

Many insurance companies in India allow NRIs to apply online or through simple video calls. You just need to share your KYC (ID proof), health documents, and sometimes go for a medical test. That’s it!

Myth 2: Premiums Are Higher for NRIs

Fact: Premiums depend on your age, health, and lifestyle, not your country.

NRIs often believe they will be charged more. But that’s not true. If you are healthy and young, you may get better rates even if you live abroad.

Some people in Canada or the USA might get cheaper premiums because of better lifestyle habits or medical support.

Tip: Buy early. The younger you are, the lower your premium.

Myth 3: Claims Will Be Rejected If I Live Abroad

Fact: Claims are paid even if you live overseas.

If you’ve submitted all the correct documents, and the policy was issued legally, your family will get the claim amount, even if they live in another country.

Insurance companies transfer the money to your nominee’s bank account, in India or abroad.

To avoid issues, always:

Fill your form honestly
Disclose all medical conditions
Mention your NRI status clearly

Myth 4: I Must Travel to India for Medical Tests

Fact: Not always. Many companies allow medicals in your resident country.

For example, if you’re buying term insurance for NRI in USA, insurers may arrange a health check-up in your city. They may also allow telemedical tests — simple video consultations instead of hospital visits.

You don’t always need to fly back to India.

Myth 5: Indian Term Plans Are Not Useful for NRIs

Fact: Indian term plans are highly useful.

Here’s why:

Lower Premiums: Compared to Western countries, Indian plans are cheaper.
Coverage in INR: If your family lives in India, they’ll need money in rupees.
Trusted Companies: LIC and private players have high claim settlement ratios.
Tax Benefits: Under Section 80C and 10(10D), you get tax benefits in India.

So yes, even if you're living in Canada, USA, or any other country, a term plan from India makes a lot of sense.

FAQs from NRIs

Can I pay my premium in foreign currency?

Some companies allow payment in foreign currency, but most prefer Indian rupees. You can pay through NRE/NRO bank accounts or international credit cards.

Will I get tax benefits abroad?

That depends on your resident country. But you do get tax benefits in India under Indian income tax rules.

Can I include my spouse or parents in the policy?

Yes, many plans allow joint cover or adding parents. Make sure they also complete the KYC and health requirements.

Real-Life Example:

Amit, an NRI in Toronto, Canada, bought a term plan from India 5 years ago. Sadly, he passed away due to a sudden illness. However, since he had filled everything correctly and paid his premiums on time, his wife in India received the full ₹1 crore claim within 30 days.

That money helped her take care of the children’s education and pay off a home loan.

Moral of the story? Term insurance works – even if you live abroad.

Final Thoughts

Don’t believe the myths. NRI term insurance is simple, safe, and smart.

Whether you're searching for NRI term insurance Canada or planning to secure your family while living in the USA, buying a term plan from India is a smart move.

Just remember: