Term Insurance for Expats: Ensuring Coverage Abroad

Expats are individuals who live and work in a foreign country, often temporarily. Their financial responsibilities towards their loved ones back home remain unchanged despite living abroad. That is why having term insurance is essential.

Term life insurance provides coverage to individuals residing outside of India and ensures that their loved ones are financially protected even if they are far away. In the event of the insured's absence, term insurance offers a financial cushion to their beneficiaries and helps them fulfil their financial obligations. 

Why should expats buy term insurance?

Below are some reasons to buy expat term insurance: 

1.   Offers financial security to the family

Term insurance plays a critical role in providing financial security to your family back home, ensuring that they can maintain their preferred standard of living even in your absence. With a high sum assured, ranging from ₹ 50 lakh up to ₹ 5 crore, term insurance offers substantial coverage that can address both essential and non-essential needs of your loved ones. It enables your dependents to cover various expenses such as loan dues, education expenses, rent, healthcare costs and more.

2.   Provides long-term coverage

Term insurance offers long-term coverage, providing expatriates with peace of mind, as their families will be financially secure for years to come. With the flexibility to secure coverage until the age of 99 years, term insurance ensures lifelong financial protection for your loved ones. 

This makes it an ideal option for expatriates of all ages. It allows you to purchase coverage at any stage of life and guarantees your family's financial security.

3.    Adds extra protection through riders

Depending on the nature of your job, you may face occupational hazards or threats. In such circumstances, term insurance offers various riders that provide additional financial protection to policyholders. Riders such as critical illness, terminal illness, permanent disability and accidental death riders are designed to offer enhanced coverage beyond the basic cover provided by the term plan. 

The critical illness rider provides a lump sum payout if diagnosed with a critical illness. If the policyholder experiences permanent disability, the permanent disability rider waives future premium payments. Lastly, in the event of an accidental death, the accidental death rider offers an additional payout to the beneficiary on top of the basic payout.  

4.   Provides tax benefits

Expats can enjoy tax benefits on the premiums paid for term insurance policies. Under Section 80C of The Income Tax Act, 1961, the premiums paid towards a term insurance plan is eligible for tax deductions.

Furthermore, the insurance payout received by the family is generally exempt from tax, subject to conditions outlined in Section 10(10D) of The Income Tax Act, 1961. 

Things to note when purchasing a term insurance plan for expats

When purchasing a term insurance plan for expatriates, there are several important factors to consider:

1.   Look for an insurer that provides term insurance for expatriates

It is essential to select an insurance provider that offers specific term insurance plans tailored for Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs), Persons of Indian Origin (PIOs) and foreign nationals. These specialised plans are designed to address the unique needs and circumstances of expats and can provide comprehensive insurance coverage and financial support.

2.    Seek flexible payment options 

It can help to explore the flexibility of payment options offered by different insurers. You can opt for a term insurance plan that aligns with your financial preferences and has flexible payment schedules, including annual, semi-annual, quarterly and monthly payment options. This can ensure you can select a payment frequency that suits your budget and income capacity. 

It is also essential to look for a plan that allows you to make online premium payments. 

3.     Check for convenient medical check-up options

An aspect to consider is having the convenience of medical check-up options provided by the insurance company. It can be hard to come to India only for a medical check-up. So, it would help if you look for insurers that offer convenient alternatives such as tele medical or Video Medical Exams (MER). 

These innovative options enable you to undergo the necessary medical examinations remotely and eliminate the need for physical visits that can be expensive and time-consuming.

To sum it up

Regardless of your country of residence, term insurance remains essential for safeguarding your family's financial future. While earning in a different country may seem advantageous, saving enough to protect your loved ones adequately can still be challenging. Term life insurance provides an affordable option to ensure that your family's financial needs are met in your absence..  

You can assess your specific financial requirements and select a suitable coverage amount by using a term insurance calculator, which allows you to tailor your policy to meet your family's needs.