A term insurance policy provides financial protection to the policyholder’s beneficiaries in case he/she passes away during the term of the policy. Furthermore, NRIs can purchase term insurance to secure their family.
In this article, we will give some tips on how to select a term insurance policy for NRIs.
Every person tries to provide financial protection to their family. Therefore, term insurance can be a great option for people who want to secure their family.
Term insurance can reduce the financial burden of a family. It offers a sum assured to the family of the policyholder. The insurer can provide this sum assured to the family in case the insured person passes away during the tenure of the policy. Furthermore, such a policy can be availed by NRIs.
Here are some tips for choosing the right term insurance for NRIs-
Claim Settlement Ratio
This is one of the most important factors that every person should consider while looking for insurance policies. The claim settlement ratio refers to the quality of the insurer and how quickly a claim is settled.
The ratio describes the number of claims settled against the number of claims made in the last year. The higher the claim settlement ratio, the better the insurer can be.
Claim Settlement Process
It is important to look for an insurance company that offers an easy claim settlement process. This is because it will help the policyholder’s beneficiaries to file the claim conveniently. Check the insurer’s website to understand the process and find out if a claim can be filed from a foreign country.
Limited Premium Payment Option
There are term plans that offer limited premium payment options. With this option, an NRI can put a limit on the number of the premium payment term.
Premium Payment Options
While Indian insurance providers allow the premium payment to be made in domestic currency, there are insurers that enable the policyholders to remit the money directly to the insurance company’s bank account.
Things to Keep in Mind While Selecting a Term Insurance Plan
The sum assured is the amount that the beneficiaries of the policyholder can receive in case he/she passes away during the tenure of the policy. Therefore, a person should know how much sum assured will be sufficient for his/her family.
The premium is the amount that a policyholder needs to pay towards the policy. It depends on various factors such as the sum assured, add-ons, etc. People should compare the benefits of various term plan and their premiums while selecting a policy. This will help them make a better decision.
There are some documents that are required for NRIs to buy a term plan, like- passport copy, duly filled application form, age proof, income proof, etc.
For NRIs, insurance companies offer a grace period in case they fail to make a premium payment. If a policyholder defaults on premium payment, then the insurer allows him/her to pay the premium within the grace period.