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Enjoy the benefit of a term insurance policy even after you emigrate

A term insurance policy provides you an unmatched coverage for financial security for yourself and your family. The policy is a protection oriented life insurance plan which covers the risk of premature death and compensates your family for the financial loss suffered. Moreover, given the fact that the plan has a low premium, it allows you to opt for a high sum assured so that you can create the desired financial corpus for your family’s safety. But does the plan work if you emigrate?

Foreign shores lure many individuals who go abroad for work or business. Such individuals might go and live abroad either for a specified time period or permanently. In such situations, the term insurance policy does not get affected. Let’s understand how –

A term insurance plan covers you against the risk of premature death. This death can occur on Indian soil or in another country. The term plan is not affected by the place of death. You can still enjoy the coverage under your existing policy if you emigrate during the term of the policy. Here are some points which you should keep in mind if you have a term plan and you emigrate –

  • Continue the premium payment

In your existing policy you need to continue paying the premium in Indian currency. Even if you settle abroad you should have an Indian bank account from where the premiums can be paid towards the term plan online. If the premiums are discontinued, the policy would lapse and you would lose the coverage. Moreover, term plans also do not have any surrender value or paid-up value. So, premium continuation is quite important if you want to enjoy the coverage offered by the policy.

  • Payment of claim

In case of death during the tenure of the policy, the insurance company would pay a claim even if you settle abroad. However, the claim would be paid in Indian currency. You should, therefore, ensure that your nominee can contact the insurance company in case of your demise. Claim related documents should be submitted to the company to get the claim.

  • Limited pay term plans

If you are likely to emigrate and you want to buy a term plan online, you can opt for limited pay term plans. Under limited pay term plans, premiums are payable for a limited period while you can enjoy coverage for a longer tenure. These plans, therefore, ensure that the coverage continues even when you emigrate without you having to ensure premium payments throughout the policy tenure.

  • Tax implication

You can still claim the deduction on the term insurance premium under Section 80C if you emigrate. If you have income in India, your investment in a term plan online would be eligible as a tax-free deduction from that income. This would reduce your tax liability. Furthermore, in case of death, the death benefit would be completely tax-free even if you have emigrated.

Remember these points when you emigrate and you can enjoy the benefits of a term insurance plan. Moreover, term insurance plans allow NRIs to buy the policy. So, if you are emigrating and you wish to invest in a term plan online, you can do so even after you emigrate. You can buy a policy as a NRI and enjoy the benefits which the policy has to offer.

Claims under term insurance plans are unaffected by your residency status as long as you are an Indian citizen at the time of buying the policy. Moreover, buying a term plan in India is much more cost-effective than buying the policy in a foreign country where you emigrate to. So, buy a term insurance plan in India at lower premiums and enjoy the benefits of the policy even when you emigrate.


Published by Nidhi Mehra

I am blogger with 5 years of experience in writing articles and topics related to finance and funds

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