Guide for NRIs to purchase Health Insurance
Buying a health insurance policy for non-resident Indians (NRIs) is an important financial decision. So, if you are an NRI and are confused about buying a health plan in India. Here are a few things that you need to know before purchasing a health cover whether it's for you or your family.
Check the conditions for making an insurance application
For NRIs who are seeking health insurance in India, it is important for them to know about the terms and conditions for filing an insurance application. However, to apply for an insurance policy in India, they are required to submit a duly filled proposal form along with the documents such as an attested copy of passport, copy of pan card, details of the bank account in India along with the additional information sought by your insurer. You will be issued a policy as soon as you complete the entire procedure.
Terms of geographical coverage
One of the most important things to check in a health insurance policy is the clause of geographical coverage. Your policy might cover treatments in India only and thus treatments taken outside India will not be covered under the policy. However, due to competition, some insurance companies in India have now begun covering their policyholders outside India also, but only for the critical ailments and procedures such as a brain tumour, cancer, organ transplant, and so on.
The significance of underwriting
Insurers have elaborated underwriting guidelines that serve as benchmarks for a particular type of policy issued in the country. The terms and conditions for an NRI applicant will be different from that of a general individual. This is because NRIs are considered riskier than normal applicants. Therefore, health insurers have set a certain limit on the sum assured and put stringent procedures in place.
Regulations under FEMA
FEMA stands for Foreign Exchange Management Act. The Act allows NRIs to hold insurance policies issued by foreign companies during their stay in India. For global coverage by Indian insurers, this act allows the insured to receive the claim amount as a foreign currency which will be directly transferred to their bank accounts.
Income tax benefit
Even NRIs can also enjoy the same tax benefits as Indian residents under Section 80D of the Income Tax Act. NRI policyholders are eligible for deductions of Rs 25,000 for self, spouse as well as their dependent children. Apart from this, they are also eligible for an additional Rs 25,000 deduction towards their parents' health insurance under the same health plan.
Additional Points for NRIs Planning to Buy a Health Insurance Policy in India-
- If you are planning to settle in India after 4 to 5 years, then it is ideal to opt for a health insurance plan in the country where you are currently residing.
- If you are returning to India in less than 3 years, then you should choose a health insurance policy while you are on a vacation to India. However, make sure that the terms and conditions of the plan you choose meets all your health requirements.
- If you have already bought a health insurance policy in India and are now moving out of the country for a short period, then it is preferable to maintain the policy while being abroad. But if you plan to stay out of India for a longer duration, then there is no point in keeping the plan active as with geographical restrictions you cannot avail of any of the benefits.
Keep the above factors in mind and do your due diligence when choosing any health plan that best meets your health requirements.
