FAQs For NRIs

+ Expand All|- Collapse All

• Can life insurance policies be issued to Non Resident Indians (NRI) and foreign nationals based in India?

  Yes, life insurance policies can be issued to Non Resident Indians and foreign nationals based in India, subject to some conditions specified later.

• Who is an NRI , PIO and foreign national?

  NRI - Non Resident Indian:

  A citizen of India (holding a valid passport issued by Govt. of India) and temporarily residing in the country of his/her present residence.

  PIO - Person of Indian Origin:

  Person of Indian Origin means a citizen of any country other than Bangladesh or Pakistan, if

  • He at any time held Indian passport; or
  • He or either of his parents or grandparents was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955); or
  • The person is a spouse of an Indian citizen or a person referred to in above two sub-clauses

  Foreign national:

  A citizen of a foreign country based in India.

• Is there any restriction on the type of policies that can be issued to NRI, PIO and foreign nationals based in India?

  You can avail of all policies except for Medicash, Medicash Plus and Healthy Family. All riders are also available except for WOP and Payor RiderAn attachment to a policy that modifies its conditions by expanding or restricting benefits or excluding certain conditions from coverage..

• Are the policies issued by Max New York Life denominated in Indian Rupees? How is this different from policies denominated in foreign currency?

  The policies issued by Max New York Life are denominated in Indian Rupees (also referred to as ‘Rupee Policy’), which stipulate that the amounts payable and receivable will be paid or received in Indian Rupees only. In contrast, a foreign currency policy is one, which is designated, in a foreign currency.

• How can the premiumA regular payment made to the insurance company to keep the policy in force. towards the policy be paid?

  As an NRI, you can remit the premiumA regular payment made to the insurance company to keep the policy in force. amount through a RFC, FCNR, NRE or NRO bank account held in your name, either by way of rupee draft drawn on any of the above accounts or by way of remittance in Indian Rupees equivalent to the foreign currency.

• For a policy denominated in Indian Rupees, can the premiumA regular payment made to the insurance company to keep the policy in force. be paid in foreign currency?

  Yes, premiumA regular payment made to the insurance company to keep the policy in force. may be paid in foreign currency for a policy denominated in Indian Rupees.

• In what currency would the claims / maturity proceeds / surrender value of a policy issued in favour of NRI or foreign nationals be settled?

  The claims / maturity proceeds / surrender value of a rupee life insurance policy issued in favour of NRI, PIO or foreign national shall be settled in Indian Rupees. Having said that, as per the provisions of Foreign Exchange Management (Insurance) Regulations, 2000 -Life Insurance Memorandum, payments in foreign currency will be permitted only in proportion to the amount of premiumA regular payment made to the insurance company to keep the policy in force. paid in foreign currency from the total premiumA regular payment made to the insurance company to keep the policy in force. payable.

• For Rupee policies, can the claimNotification to an insurance company that payment of an amount is due under the terms of the policy. be settled in foreign currency, irrespective of whether the premiumA regular payment made to the insurance company to keep the policy in force. has been paid in foreign currency or Indian Rupees?

  No, the claimNotification to an insurance company that payment of an amount is due under the terms of the policy. payments will be settled in foreign currency only in proportion to the amount of premiumA regular payment made to the insurance company to keep the policy in force. paid in foreign currency.

• Can NRIs or foreign nationals repatriate the claims / maturity proceeds / surrender value of the policy outside India?

  Yes, NRIs or foreign nationals can repatriate claims, maturity proceeds or surrender value of policy outside India, however, this would depend to a very large extent on the kind of account from which the premiumA regular payment made to the insurance company to keep the policy in force. has been remitted and the manner in which the claims, etc. are to be repatriated.

  Note: Repatriation outside India means the buying or drawing of foreign exchange from an authorised dealer in India and remitting it outside India through -

  • Normal banking channels or
  • Crediting it to an account denominated in foreign currency or
  • Crediting it to an account in Indian currency maintained with an authorised dealer from which it can be converted in foreign currency

• What are the tax benefits available to NRIs on life insurance policies?

  Following are the tax benefits available to NRIs whose income is assessed in India and who files an income tax return in India:

  • Under section 10(10A): Any payment received in commutation of pension received from a pension fund set up by an insurance company is exempt from tax
  • Under section 10(10D): Any sums received under a life insurance policy are tax free. However in cases where the premiumA regular payment made to the insurance company to keep the policy in force. paid is in excess of 20% of the capital sum assuredThe sum assured is the minimum amount payable to the assured or his/her dependants on the death of the life assured. within a year, benefits that are paid in excess of premiums will be taxable. The benefits from a keyman insurance policy and any sum received under Sec 80DD, Sub-section (3) are also taxable
  • Under section 80C: PremiumA regular payment made to the insurance company to keep the policy in force. paid towards a life insurance policy is eligible for deduction from the taxable income of the assessee. This is subject to the overall cap of Rs. 1 Lakh
  • Under section 80CC: Premiums paid towards pension funds is eligible for deduction from the taxable income of the assessee. This is subject to the overall cap of Rs. 1 Lakh

• Can the policy document be sent to the NRI’s correspondence address outside India?

  Yes, the policy document can be sent to the NRI’s correspondence address outside India, if so requested in the proposal form.

+ Expand All|- Collapse All