Insurance is the need of the hour in the contemporary unpredicted world. Getting insured is very necessary so even if you are an NRI you should buy insurance to overcome an unforeseen medical emergency, travel issues, or any other unforeseen mishappening. In the article below, we will discuss ‘NRI Insurance: travel/ health/ medical insurance requirements’. Firstly, you should know that health insurance for Non-Resident Indians is completely based on the legal residential status of the person applying to get insured in India. Health Insurance can have legal and tax implications, so the applicant should strictly adhere to the stated documentation process while purchasing health insurance.
What is health insurance for NRI in India?
A health insurance policy is a type of insurance that covers hospitalization expenses, pre and post-hospitalization expenses that, includes ambulance costs, cost of medicines, and other related expenses. Health insurance is a very comprehensive insurance policy that consists of a set of hospitals under it. It means that if the individual is admitted to the panel hospitals of the insurance company, they are not required to pay any of the expenses.
Is an NRI eligible to buy health insurance in India?
With globalization and technological advancement, the world has turned into a global village where all the countries are connected through technology. This technological global village has some advantages and disadvantages. A recent example of the disadvantage of being a global village is the COVID-19 pandemic that started in China and spread all around the globe. During the COVID-19 pandemic, people faced a lot of medical hazards, especially those who were Non-Resident Indians, as they were completely clueless as to whom they should seek help. The Global pandemic made us realize the importance of health insurance. Now the question arises, ‘Is an NRI eligible to get health insurance in India?’
Yes, a Non-Resident Indian can apply for health insurance in India. A lot of Indians are migrating to other countries in terms of better opportunities, education, lifestyle, etc. Though they are migrating to other countries, it is well-known that those countries cannot provide them with a homely feeling because that feeling can be acquired in the homeland itself. People search for their homes when in trouble; that’s why many NRIs want to purchase health insurance in India. Non-Resident Indians are completely eligible to get health insurance policies in India, but some requirements must be fulfilled. Besides this, they are also required to submit important documents, including residence proof, income tax return, passport, etc.
Necessary conditions kept in mind while making an insurance application as an NRI in India
While applying for an insurance application, you need to understand that the Non-Resident Indian is required to provide all the documents and complete the procedure during their period of stay in India. The NRI should fill out a proposal form along with the documents to apply for a health insurance application. The documents required for making an insurance application are passports, Permanent Account Number (PAN) card, residence proof, details of bank account in India, the Person of Indian Origin (PIO) card, etc. Remember that the insurance company can ask you to present some other additional documents, so you also need to submit those documents. The company will keep Indian Rupees as the currency for future transactions. Once the process is completed, the company will issue the policy to the applicant.
Tax benefits available for NRIs in India
Similar to other Indian residents, a Non-Resident Indian can also claim the same tax exemptions applicable under Section 80 D of the Income Tax Act. Under Section 80 D of the Income Tax Act, the policyholders are completely eligible for the deduction of rupees 25,000 for their policies. Besides this, the applicant is also eligible for an additional rupees 25,000 deductions in case their parents are covered with the same health insurance plan. This sounds like icing on the cake because the individual is already getting a deduction of 25,000 rupees for their health insurance policies. They also get an additional 25,000 rupees deduction if their parents are also covered in the same insurance plan.
Carefully go through terms of geographical coverage as an NRI in India
The terms of geographical coverage are very important in a policy contract. One should carefully read geographical coverage because skipping this page while signing the agreement with the insurance company can lead to huge problems. The majority of insurance companies specify the terms and conditions that all the benefits and expenses covered under the health insurance plan are limited only to the treatment in India.
It means that the health insurance you are purchasing has geographical coverage to India only. To understand this better, let’s take the example of an NRI who resides in the United States and wants to claim the benefits of health insurance purchased in India. The NRI will not be able to get any of those benefits covered in the health insurance because the plan was bought in India, and its geographical restriction is only limited to India. Outside India, the health insurance plan is of no use, so if you are signing an agreement with a health insurance company, you should ask this specific point before signing the contract.
Essential government regulations (Foreign Exchange Management Act) for an NRI in India
The government regulation for Non-Resident Indian insurance is called the Foreign Exchange Management Act, which stipulates the condition concerning the insurance policies purchased inside and outside India. According to the policy, a person resident in India can continue to hold any insurance policy issued by a foreign insurance company. But for that, the person has to obtain the prior permission of the concerned Indian authority at the time of its issuance. To claim those settlements, the amount insured may be credited to the foreign bank account of the applicant or the resident foreign currency account maintained by the authorized bank of the individual.
The reason why underwritings are very important for an NRI in India
One should always read the underwritings as the insurance companies have detailed underwriting guidelines. The underwriting guidelines serve as the benchmark for a particular type of policy issued by the insurance company. The rules and regulations and terms and conditions for a Non-Resident Indian health insurance application will be different from a general health insurance application. This is because the Non-Resident Indians are generally considered riskier than the Indian applicants because confirming the facts furnished by the NRIs are relatively difficult. That’s why the health insurance company always sets a specific limit on the sum assured and puts stringent procedures in place when dealing with Non-Resident Indian applicants.
All the health insurance companies and their policies are generally framed around mitigating risk; that’s why the companies have strict guidelines that applicants should read to understand the insurance policy better. Non-Resident Indians do not reside in India; that’s why the companies generally perceive that settling any claims and corroborating authenticity has a lot of hurdles. That’s why the companies find Non-Resident Indians risky, have strict guidelines and keep their options limited for them.
Things to remember while buying health insurance as an NRI in India
Here are certain points that an individual should take into consideration before buying an NRI health insurance policy in India: –
If the applicant plans to return to India within three years, he should purchase health insurance in India. However, you should always ensure that the terms and conditions of the health insurance plan should meet your requirements. The main benefit of purchasing a plan a year or two years before returning to India is that the individual will not need to worry about any stressful process of purchasing health insurance immediately after landing in India. Besides this, because the applicant has purchased health insurance a year or two years before coming to India, so the individual has completed the waiting clause for many illnesses. So now, the policyholder can easily get the benefits of his health insurance plan and will be eligible to claim the insurance in case of any health emergency.
On the other hand, if you plan to settle in India after four or five years, you should purchase a health insurance plan in your current residence country. It’s simple if the individual is planning to return to India within three to four years, then it’s okay, but if the individual is returning to India after four years, then, in that case, the individual should get a health insurance policy in its country of residence. The individual should not purchase a health insurance policy in India if they are planning to return to India after four years because it is a long period, and it is always better to wait before purchasing a plan.
If the applicant already maintains a health insurance policy in India and is moving out of the country for a short period. In that case, the individual should maintain the policy even if they are abroad. But this is not the same if you are going to stay out of India for a longer duration. If the applicant plans to stay out of India for a long period, then there is no point in keeping the plan after, as due to the geographical restrictions, the applicant will not be able to claim the benefits of health insurance.
Benefits of getting health insurance for an NRI in India
Health Insurance for an NRI in India has many benefits; some of them are as follows: –
One should get health insurance before visiting India in case they meet a health emergency. Many Non-Resident Indians suffer from flu-related or stomach-related issues after visiting India, so getting health insurance in India will provide the individual with adequate coverage according to their requirements.
Secondly, health insurance in India has no geographical restrictions. Many health insurance policies come up with geographical restrictions; to understand this better, let’s take the example of the USA. If you are residing in the United States of America and have a health insurance policy there, then the policy may have no or limited coverage outside its geographical limits. But this is not the case with health insurance in India. Unlike America, Indian health insurance will provide you insurance coverage throughout the country without any geographical limits.
There are many tax benefits of purchasing an insurance policy. Health insurance offers financial support for the covered medical issues; it also provides some tax benefits to the individual. The individual can get tax benefits under Section 80 D of the Income Tax Act if they purchase health insurance in India. Section 80 D is related to the tax liability for taxable income in India, and the exact benefit of this section depends upon the premium and the tax benefits slabs for that particular financial year.
Claiming Indian health insurance is quite easy compared to foreign land health insurance. See, if you meet a medical emergency and need to claim the financial expenses, then it would be easy to claim those financial expenses in India compared to the health insurance in foreign countries. The individual can directly get cashless claims if they have a tie-up with several hospitals, making the process hassle-free. But the same facility might not be available if you have foreign-based insurance because it would require a lot of documentation, communication, inspection, etc. All this process is going to be very stressful and time-consuming.
Health insurance in India provides continuous coverage throughout the policy period to the Non-Resident Indians who frequently travel to India. For example, in case you buy a policy that covers a coverage period of 2 years, so you don’t need to buy insurance every time you visit India because you already have a policy that covers two years.
Lastly, the waiting period advantage, Certain health insurance policies require the individual to complete a waiting period before they can make a claim. It generally happens with the pre-existing disease that exists while purchasing the policy. If you are NRI planning to return to India permanently, you should buy health insurance as soon as possible because it will help you meet the waiting period requirement. You should purchase health insurance in India a few years before returning to India because this way, your waiting period will have been served.
The process through an NRI can apply for health insurance in India
The process of applying for health insurance in India can vary depending upon the insurer and the insurance company. But still, below, we are providing you with an overview of a few steps that one might need to follow while applying for health insurance in India: –
Step 1: Do complete research about the different insurance companies and compare their health insurance plan. After doing a lot of research, you need to get in touch with the insurance company. You can use their website, call, email, or app to connect with the insurance company.
Step 2: Carefully read the eligibility criteria and documents required to apply for health insurance in that company.
Step 3: After doing the research and reading about the plan, select a plan that meets your requirement.
Step 4: Next, you must undergo all the medical tests if the insurance company demands it.
Step 5: After doing all the medical tests suggested by the insurance company. The applicant is required to pay the applicable premium.
Step 6: Once the individual pays the applicable premium, they will receive the policy from the company.
Step 7: At last, the individual is required to verify the details, and if there is any error, then the individual must rectify that error.
Things to keep in mind before purchasing health insurance in India for NRI parents
If you are in an NRI and want to buy health insurance for your NRI parents, then there are specific points you should keep in mind before purchasing a plan. The following things are required to be kept in mind while making an informed decision while buying health insurance for NRI parents: –
First of all, the individual needs to see coverage. One should always purchase a policy that offers maximum coverage. The coverage should be in terms of the sum insured and the policy features; for example, the policy purchased by the applicant should not only focus on the hospitalization but also cover the pre-hospitalization and post-hospitalization expenses made by the applicant.
You should inform the insurance company if your parents already have a pre-existing disease. The insurance company usually covers the pre-existing diseases after completing the waiting period by the insured person.
Always remember that the higher the person’s age, the higher the insurance premium will be. While insuring your parents, you should never compromise on the overall policy features because the insurance company demands a higher premium. The reason why the insurance company is demanding a higher premium is age because the age factor of the individual plays a huge role in the high cost of health insurance.
Before purchasing health insurance, the individual should ensure that the insurance has a wide range of top hospitals in its network. A Hospital network is something that is very important and should be kept in mind before purchasing health insurance—admitting the insured person to a network hospital help in easily claiming the medical expenses in a hustle-free manner if you have admitted the insurer in the network hospital of the insurance company. In that case, there is an understanding between the insurance company and the hospital, so the claims are raised and settled in a cashless manner directly between the hospital and the insurance company.
Lastly, the payable premium of the individual will be influenced by several factors such as parents’ age, health condition, type of policy chosen, etc. The payable amount will be low in the case of a long-term policy and high in the case of a short-term policy.
What is NRI Medical Insurance in India?
NRI medical insurance provides limited coverage for hospitalization expenses and the treatment to watch the pre-specified elements and the accidents. Unlike health insurance, medical insurance doesn’t offer add-on coverage like pre-hospitalization and post-hospitalization expenses. The medical insurance is based on the sum assured, and medical insurance cannot exceed 5 lakh rupees.
One can make two types of claims under the medical insurance policy first is cashless, and the second is reimbursement.
In the case of a cashless claim, the insured individual should get treatment from the hospital, which comes under the panel of the insurance company. In that case, the insurance company will take all the hospitalization expenses, and then the insured person does not need to pay any money.
In case of a reimbursement claim, the insured person needs to inform the insurance company about the hospitalization. The individual needs to inform in advance or at the time of admission. In reimbursement, the applicant should keep the original documents like bills, discharge cards, etc., safe to get the reimbursement claim.
Difference between health insurance and medical insurance as an NRI in India
NRI Health insurance and NRI medical insurance are often used interchangeably but being an aware person; you need to know that there is a slight difference between the two. Medical insurance provides coverage for only hospitalization and pre-specified ailments and accidents, and that too for a pre-specified amount. On the other hand, health insurance provides coverage against hospitalization expenses, pre and post-hospitalization expenses, ambulance charges, etc.
If you are purchasing medical insurance, it will not provide you with any add-on coverage, while health insurance offers add-on coverages like accidents, disabilities, critical illness, etc.
Besides this, medical insurance doesn’t offer any flexibility regarding coverage. In contrast, health insurance, on the other hand, allows its policyholders to reduce their policy duration, health insurance premium amount after a certain period, etc.
Health insurance provides insured persons with critical illness cover for hazardous diseases like cancer, heart attack, etc. In contrast, medical insurance, on the other hand, doesn’t provide as such any critical illness cover.
Lastly, in the case of medical insurance, the pre-assured sum cannot exceed five lakh rupees, while in the case of health insurance, the maximum limit is six crore rupees.
What is NRI Travel Insurance in India?
NRI travel insurance is a policy that covers the risk associated with traveling. It covers the cost of the trip, cancellation, medical expenses, baggage loss, and other losses. The losses covered in the travel insurance can occur during domestic or international trips. NRI traveling insurance is a general insurance policy useful for protection against foreseen damage and financial expenses that occurs during traveling. Travel insurance is quite beneficial for people who are traveling domestically or internationally, especially those NRIs who are travel enthusiasts. It covers the following losses that occurred during traveling: –
- Theft and burglary of bags or personal belongings, baggage loss, and loss of personal belongings.
- Cancellation or delays of flight and loss of passport.
- Death of the insured person or any other medical emergency and accident.
- Disability of the insured person missed connection or departure.
- Hijack or emergency evacuations.
- Lastly, bounce airline or hotel booking.
Different types of Travel insurance for an NRI in India
Following are the different types of travel insurance policies for an NRI in India: –
- Single-trip travel insurance policy – It is like one-time travel insurance limited to a particular trip.
- Multi-trip policy – For people who travel frequently, a multi-trip travel insurance policy is ideal. This travel insurance is for travel enthusiasts and is a cost-effective travel coverage policy. The multi-trip policy covers multiple trips to certain destinations; it is a long-duration travel policy that lasts an entire year.
- Group travel insurance policy: A group travel insurance policy is for the people who travel in a group. A group travel insurance policy has a maximum limit of people. The group travel insurance policy depends on the age of the person in the group. It provides cost-effective coverage to the people traveling in a group.
- Educational travel insurance policy: This travel insurance is for people who go on educational trips. This traveling insurance policy is available for both abroad as well as for domestic travel. An educational travel insurance policy usually sets a limit on the duration of the trip, which can be a maximum of 30 or 45 days.
Exclusions in travel insurance for an NRI in India
Some travel insurance policies also have certain exclusions in specific cases for an NRI in India; those exclusions are as follows: –
If you lose your baggage or personal belongings or hurt yourself when you were high on liquor or drugs, then the insurance company will not provide you coverage for the baggage loss or medical costs.
Under the traveling insurance policy, the company does not cover pre-existing diseases, health problems, or any illness. So, if the insurer is traveling against medical advice, the company will not provide coverage for the same.
Next, the travel insurance policy covers the medical costs, but the money spent on ayurvedic, homeopathy, and cosmetic surgeries are not covered under this insurance.
Travel insurance does not provide any coverage for self-inflicted injuries, suicides, or injuries during adventure sports.
The insurance company will not provide coverage if the person travels to prohibited or uncovered destinations. The uncovered destinations or prohibited destinations are usually war-prone regions.
Lastly, if the individual loses his passport, luggage, or belongings by themselves or leaves them unattended, the company will not provide any coverage. Besides this, if the individual ships their baggage separately, the company will not provide coverage to the insurer.
Advantages of Travel insurance for an NRI in India
Following are the advantages of getting a travel insurance policy: –
- luggage benefits– Under luggage benefits, the policy covers the cost of baggage loss. The baggage of loss could be burglary or theft. The travel insurance policy may also cover the passport, loss of important documents, loss of personal belonging, or cash loss.
- Medical benefits: The travel insurance policy covers medical fees and hospitalization charges. The policy covers the expenses that occurred during any medical emergency injury or illness that happened while traveling. The medical travel insurance policy covers the cost of the ambulance, hospitalization, and other expenses.
- cancellation/delay benefits– If the flight or the trip cancels or delays due to any unforeseen reason, the insurance company will reimburse the cost in such cases. The company will provide alternative benefits like access to toilets, clothing, or food if the cancellation is made due to weather conditions, strikes, or any other cause. One can claim the same benefits if they cancel or delay the trip due to any emergency.
Lastly, the insurance policy also provides some alternative benefits, like customizing policies for travelers. Some insurance companies provide customized travel protection to the policyholder.
Conclusion for Insurances as an NRI in India
Being an NRI purchasing a health insurance policy in India can be useful if the individual is planning to settle in India. But we will always suggest the policyholders be mindful of geographical restrictions and carefully read the insurance company’s guidelines and terms and conditions. Before purchasing insurance, the individual is advised to compare the health insurance policy of different insurance companies. It would be best to ask all your doubts before signing the agreement or purchasing the policy to avoid confusion in the future.
In today’s world health insurance is a must thing that every individual should have. Health emergencies can never be predicted, so to be on the safe side, one should get health insurance, especially if you are an NRI, then you should get health insurance before coming to India. Due to the two countries’ geographical, climate, and atmospheric changes, you can get flu or stomach-related problems, so it is always best to be on the safe side and get health insurance. The individual should have a complete understanding of policy wordings in order to avoid fuss in the future. Besides this, you should always purchase a policy that best suits your requirements.
The travel insurance policy can vary depending on the insurance company according to the provisions of the coverage and exclusions. If you want customized travel insurance, you can also opt for that because many insurance companies provide customized travel insurance policies to people. Besides this, one should always read all the terms and conditions, disclosure statements, and policy papers before signing them, especially in the case of a customized NRI travel insurance policy. Being an NRI, you should always choose a company that provides exhaustive coverage and high financial protection.
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