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NRI Insurance

Insurance is the act of risk management that is taking precautions to evade against the risk of a liable, uncertain loss. It is defined as the even-handed allocation of the risk of a loss from one individual to another, in exchange of reimbursement. Insurance policies are sold by companies. The rate of the insurance is the deciding factor for the premium amount which is the payment to be made for the coverage. Banks and insurance companies come out with various schemes time and again to attract people to insurance schemes. Insurance schemes include life insurance, well being insurance, foreign travel insurance, household insurance, car insurance and two-wheeler insurance. Depending on the amount one wants to insure, an insurance coverage is charged calculated as a certain percentage of the principal insurance amount and this coverage is paid by the policy holder over a period of time. After the insurance coverage is paid for the determined time the policy lies stagnant for a certain time and then the insurance can be claimed. In case the event for which the entity being insured takes place before the stagnant period is complete, the policy holder is reimbursed the insurance amount in whole.

Non Resident Indians also enjoy insurance schemes at par with their other fellow Indians. Indian citizens' who go on temporary or long term visits abroad can safeguard their property, assets and life through insurance schemes. This is possible through the purchase of tailored insurance products which are offered by a multitude of insurance companies and banks. NRI's are also allowed to take up loans against their policies too. They can tailor their insurance portfolios without any upper limit on the sum to be insured. However this is not the case with the POI citizens. In case of a Person of Indian Origin he or she can only be covered up to a maximum limit of twenty lakhs only. They cannot apply for joint profiles too. NRI's however can opt for joint life plans which have the team insurance element.

The foreign exchange regulations have certain policies and rules with respect to the life insurance schemes for NRI's. Since the policy papers are considered as securities these documents cannot be taken out of the country without the consent of the Reserve Bank of India. for NRI's the premium payment can be made online and it is the preferred mode of payment. It is also possible to remit the premium amount through FCNR or NRE accounts through approved banking channels, money orders etc. if NRI's have people in India they can also make the payment on the NRI's behalf. For NRI's the insurance claims are made in foreign currency as an exception. But to avail this benefit the policy holder must be an overseas resident and should have paid all the premium dues in foreign currency.