Who is an NRI?

Non Resident Indian is considered as an Indian only when he/she comes back to India for employment, vocation or carrying out business work or some other reason that imply an uncertain stay in the country. In case the person comes to the country with intention of a short stay he/she may not be regarded as a resident in India.

Those who take up jobs in abroad after the completion of their higher studies are regarded as NRIs. (Only from the time they take up jobs in abroad).

‘Non Resident Indian’ widely termed as NRIs broadly covers three types of individuals/entities. They are as follows:

Indian citizens who stay abroad for employment or for carrying on a business or vocation or for any other purpose in circumstances indicating an indefinite period of stay outside India.

Indian citizens working abroad on assignments with foreign Governments/Government agencies or International/Regional Agencies like the United Nations Organisation, International Monetary Fund, World Bank, etc.

Officials of the Central and State Governments and Public Sector Undertakings deputed abroad on temporary assignments or posted to their offices (including Indian Diplomatic Missions) abroad.

Who is a Person of Indian Origin (PIO)?

person is considered to be of Indian Origin (excluding countries like Pakistan, Bangladesh or as announced by the state from time to time) if he/she at any time held an Indian passport or he/she or either of his/her parents or any of his/her grandparents was an Indian and a permanent resident in Undivided India at any time. A wife of an Indian Citizen or of a person of Indian Origin is also considered to be of Indian Origin if she may be of non-Indian parentage.

How is an NRI defined for Income Tax Purpose?

According to Income Tax Act, 1961, an individual is said to be a ‘resident’ in any year if he has been in India in that year:

for a period of 182 days or more; or

for a period of 60 days or more and has also been in India within the preceding four years for a period of 365 days or more

However, the period of 60 days is increased to 150 days in case of citizen of India or a person of Indian Origin who has been outside India and comes on a visit to India, and to 182 days in case when a citizen of India who leaves India for purposes of employment outside India, or as a member of a crew of an Indian ship.

Can NRIs buy Life Insurance Policies?

Yes, NRIs can buy Life Insurance Policies issued by Insurance companies registered in India. The Policy premiums have to be paid in Indian Rupees.

Are Green Card holders and Foreign Nationals of Indian Origin treated as NRIs?

No, Green Card holders and Foreign Nationals of Indian origin are not treated as NRIs for the purpose of allowing Insurance. They are treated as Foreigners and the underwriting rules as those prescribed for foreigners will be applicable.

In which currency can NRIs buy Insurance policies?

The NRIs will be allowed insurance policies in Indian Rupee Currency only.

When can NRIs/ Foreign Nationals of Indian Origin buy insurance policies?

NRIs/Foreign National can buy insurance on their visit to India. All the formalities of proposal completion, medical examination reports/Special reports and Moral hazard report are required to be completed during their stay in India.

They can also buy insurance from their present country of residence through Mail Order Business. All the formalities of proposal completion, obtaining medical & special reports etc are to be completed in the present country of residence (Only NRIs).

Which plans can NRIs buy?

All plans are allowed for NRIs subject to few restrictions.

Which documents are required for income proof?

A copy of Income Tax Return filed in the country of residence, if the Sum Assured exceeds Rs.15 lakhs.

If no Income Tax return is filed, then a copy of employment contract mentioning salary or a certificate from a C.A. regarding business / other income can be submitted.

Personal Financial Questionnaire (PFQ) duly filled in and signed by the proposer and counter signed by the official filling in the MHR can also be accepted as proof of income up to a sum assured of Rs. 25 lakhs.

What documents have to be submitted for a proposal under medical business?

Duly completed Proposal Form
Medical examination report along with special reports, if any
Moral Hazard report
A copy of passport
NRIs questionnaire duly completed.

How are the premiums for NRI policies paid?

The premium can be paid by any of the following manner
By cheques drawn on his/her Non-Resident (External) Account or Foreign Currency (Non-Resident) Account with a Bank in India (or Joint Account provided the policyholder is one of the account holders)
By cheques drawn on bank accounts held in India in their own names, either solely or jointly with the resident member of their family i.e. father, mother, husband, wife, children, brother or sister whether the accounts have been designated as non-resident or not.
By cheques drawn on an account maintained by a resident parent or spouse of the non-resident policyholder with a bank in India, held solely or jointly with their close relatives. If the life assured is a bonafied student, premiums can be accepted if paid in India, by somebody else on his behalf.
By the absolute assignee in India wherever such policies have been assigned to a resident in India.
By the employers in respect of policies issued to their employees who have been deputed abroad by them.
Premiums can be paid in cash by a resident parent or spouse of the Non-Resident policyholder subject to his/her submitting a letter stating the relationship with the policyholder.

How are the claims settled?

The settlement of claims (in rupee) of life insurance policies in favour of claimants’ residing outside India will be permitted in foreign currency only in proportion in which the amount of premiums paid in foreign currency is in relation to the total premiums payable.

How are the claims settled for beneficiaries?

Claims/maturity proceeds/Surrender Value in respect of rupee life insurance policies issued to non-resident Indians for which premiums have been collected in non-repatriable rupees may be paid only in rupees by credit to NRO (Non-Resident Ordinary) account of the beneficiary. This would apply in cases of death claims being settled in favour of non-resident assignees. For Resident Beneficiaries:

Resident beneficiaries of Insurance claims/maturity/Surrender values settled in foreign currency may be permitted to credit the same to RFC (Resident Foreign Currency) Account if they so desire

Which laws in India govern the investments done by NRIs in Life Insurance Policies?

Life Insurance Policies bought by NRIs in India are governed by the regulations issued by the Reserve Bank of India (RBI). These regulations are known as the ‘Life Insurance Manual’.

How are the medical tests done?

On their visit to India. All the formalities of proposal completion, medical examination reports/Special reports and Moral hazard report are required to be completed during their stay in India.

From their present country of residence through Mail Order Business. All the formalities of proposal completion, obtaining medical & special reports etc, are to be completed in the present country of residence. (Applicable to NRIs only)

Does LIC offer its policies to PIOs also?

LIC offers its services to Non Resident Indians (NRI) as well as to People of Indian Origin (PIO) having foreign nationality and residing in foreign countries,

In Indian currency through its offices in India
In foreign currency through its various overseas branch offices and subsidiaries.
Existing policies completed before leaving India will continue as valid policy in India currency and premium can be continued through different modes listed below. NRI questionnaire needs to be submitted.