Term Insurance for NRIs

Buying as a non-resident

Non-resident Indians (NRIs) can buy term insurance from Indian life insurers. The policy is normally denominated in rupees, so the sum assured and premiums are fixed in rupees whatever currency the NRI earns in. The foreign-exchange side is governed by the Foreign Exchange Management Act, 1999 and the regulations made under it.

The product itself is the same term cover a resident buys, under the same IRDAI (Insurance Products) Regulations, 2024, with the same 30-day free-look period.

Underwriting

How an NRI is underwritten is largely each insurer's own practice, not a regulatory formula. Insurers keep their own lists of countries of residence: some they accept on standard terms, some at an extra premium, and some not at all. The lists differ between insurers, which is why the proposal form asks for the country of residence.

Many insurers ask for the medical examination and the signing of the proposal to take place in India, while some accept overseas or tele-medical arrangements. A later move to another country matters only if the policy wording makes it a condition, so the wording decides.

Paying premiums

Premiums are generally paid by inward remittance from abroad through banking channels, or from an NRE or NRO account held in India. Each insurer lists the modes it accepts, and its proposal documents are the guide. Individual life premiums have carried nil GST since 22 September 2025.

A claim for a death abroad

The claim rules do not change with residence: a death claim must be settled within 15 days of intimation, or 45 days where investigation is needed, and section 45 of the Insurance Act, 1938 applies as it does to any life policy.

The practical difference is in the papers. For a death abroad, insurers usually ask for the foreign death certificate to be authenticated: apostilled by the competent authority of the country that issued it or, where apostille is not available, attested by the Indian embassy or consulate there. The exact formalities vary by insurer, so its claim checklist is the guide.

Indian income tax

An NRI with income taxable in India who stays in the old tax regime can claim the deduction for life premiums under section 123 of the Income-tax Act, 2025, in force from 1 April 2026 (section 80C of the 1961 Act). The limit is ₹1,50,000 a year for all the items in Schedule XV together, and for policies issued from 1 April 2012 the premium must be within 10% of the sum assured. The deduction works only against income taxable in India and is not available in the new regime. Tax in the country of residence is a separate matter under that country's law.

Rules at a glance

Key points

• NRIs can buy term insurance from Indian life insurers; the policy is normally in rupees.
• Each insurer applies its own country-wise underwriting rules, so acceptance and terms differ between insurers.
• Premiums are generally paid by inward remittance or from an NRE or NRO account.
• For a death abroad, insurers usually ask for an apostilled or embassy-attested foreign death certificate.
• The section 123 deduction is available only in the old regime and only against income taxable in India.

Common misunderstandings

• NRI underwriting is not uniform: each insurer has its own list of accepted countries and its own terms.
• The section 123 deduction is not open to every NRI: it needs income taxable in India and the old regime.
• The Liberalised Remittance Scheme is not the rule for NRIs: it applies to resident individuals.

Questions people ask