Is Term Insurance Valid Outside India?

Buying a term insurance plan is one of the most effective ways to safeguard your family's financial future, even in your absence. The affordable premium, and the simplicity of the policy work, has made term insurance appealing to Indians residing here and abroad. Research suggests that the number of NRIs investing in a term plan in India has been on the rise over the years. But, is term insurance valid outside India? Suppose you are temporarily moving to a foreign country for a year or two in search of a job, education, or better business opportunity. In that case, you may wonder if your term insurance is valid outside India. The answer is Yes. The Indian insurance laws allow the NRIs and PIOs to invest in a term plan offered by insurance companies based in India. Their term insurance remains valid even while they are residing overseas but are subject to specific terms and conditions.If you hold a term plan and in the event of your unfortunate demise outside India during the policy term, the nominee is entitled to receive the death benefits. The insurer will pay the sum assured in a lump sum as per the policy guidelines. Although the insurance companies do not have any documentation requirements when you go overseas for professional assignment or personal reasons, notifying the insurance company about your plans to move abroad temporarily is a good practice.

• Tenure The term insurance tenure usually varies from six months to 25 years or more. As a policy buyer, you have the flexibility to choose the coverage duration. Most insurance companies have a minimum and maximum age limit for buying a term plan, which usually ranges from 18 to 60. It would help if you chose the policy duration based on your age while purchasing the policy. Experts suggest that the term plan duration should be long enough to cover the family until your children become financially independent.
• Sum Assured One of the important reasons why many people prefer buying a term plan is that it allows them to purchase a policy with a high sum assured up to Rs. 1 crore. Buying a policy with a high sum assured will enable you to provide a robust financial cover to their family.
• Premium The premium for term insurance plans is much affordable as compared to other life insurance policies . Generally, the insurers decide the premium based on important factors like age, the sum assured, health condition, riders chosen, premium payment frequency, etc. If you live abroad, you can easily pay the premium online through your NRO or NRE bank account.

Also Read: Buying Term Insurance? Here's a Guide for Age and Premium

For the vast diaspora of the Indian population abroad, knowing the answer to 'is term insurance valid outside India' holds great significance as they try to purchase a term plan in India. Buying a term plan is one of the most important steps towards creating a financial safety net for your family.However, it is essential to note that not all Indians or NRIs living abroad can buy a term plan policy. The insurers refrain from offering coverage to people residing in specific countries. Hence, you must check if your country of residence is not categorised as a high-risk country.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.