Life is unpredictable. Though we all wish for better days ahead, it is always safe to be prepared for the unexpected. That is where term insurance steps in. It is an easy life insurance plan that provides financial assistance to your family in case something untoward happens to you. It is a safety net for your loved ones.
Now, many people from India live and work abroad. They are called NRIs, which means Non-Resident Indians. Just like anyone living in India, NRIs also want to keep their families safe. That’s why term insurance for NRIs is important too.
But in case something untoward happens to the person who purchased the policy. How do their dependents claim the insurance money? If you are an NRI or a family member of an NRI, this article is specifically for you. We will tell you everything in the easiest possible manner, step by step.
First, What is Term Insurance?
Let's begin with the ground level.
Term insurance is a policy in which you pay a little money at regular intervals (known as a premium) to an insurance company. In exchange, the firm guarantees to pay a huge amount of money (referred to as the sum assured) to your family if you die within the policy duration. This money keeps your family strong in difficult times. It can be used to pay for daily needs, rent or loan, children's school fees, and so on.
Can NRIs Purchase Term Insurance in India?
Yes, they can! NRIs can simply purchase term insurance from Indian insurance providers. Most companies provide term insurance schemes especially designed for NRIs. You can apply online or with the help of a representative. It is a simple and quick process. You might be required to undergo a medical test and provide some documents.
But the primary question is: How do you or your relatives get this insurance money if required?
Let's know that now.
How Can NRIs or Their Relatives Claim Term Insurance in India?
If the NRI policy holder passes away within the policy term, his nominee (typically a family member) can receive the insurance amount. Here's how:
Step 1: Notify the Insurance Company
This is the initial and most crucial step.
The nominee must inform the insurance company about the death as early as possible. The nominee can do this:
- Online using the website of the company
- By contacting the customer care number
- By going to the branch office nearest to him/her
- Through email
It is advisable to inform the insurance company quickly so the process of claim can begin immediately.
Step 2: Fill Out the Claim Form
The insurance company will provide a claim form. It is a basic form wherein the nominee needs to provide information regarding the policyholder, his/her death, and who is filing the claim.
You can also fill the form online in some insurance companies.
Step 3: Provide Important Documents
In order to process the claim, the company will require some documents. These typically are:
- Death certificate (in English or translated)
- Policy document
- ID evidence of the nominee (such as Aadhaar or passport)
- Proof of address of the nominee
- Medical documents (in case of death due to illness)
- FIR or post-mortem (if death occurred due to accident)
If the NRI died outside the country, the nominee will also require:
- Death certificate issued by the foreign nation
- Copy of passport with visa pages
- Embalming certificate (if needed)
- Clearance from Indian Embassy (at times)
The nominee can deliver soft copies through email or courier hard copies to the office of the company.
Step 4: Wait for Verification
Once the documents are received by the company, it will begin verifying everything. They might contact the hospital, cross-check the papers, or request additional information if necessary.
This process may take a few working days to a fortnight. If everything is fine and correct, the company proceeds with the last step.
Step 5: Get the Claim Amount
Once the verification is successfully done, the money is paid by the insurance company into the nominee's bank account.
Today, NRIs have accounts abroad. But Indian insurers generally pay in rupees. So the nominee must have an Indian bank account, or the nominee can discuss with the insurer to credit it into an NRO/NRE account. And voilà! The claim is settled.
Things NRIs Should Keep in Mind
Here are some easy tips to ensure the term insurance claim process runs smoothly:
Choose a Reputed Insurance Company: While purchasing term insurance, select a company with a higher claim settlement ratio. That is, they settle most of the claims filed by customers. It's an indication that they are trustworthy.
Inform the Nominee: Inform your nominee (spouse, child, parent, or other person of your choice) everything about your term plan. Provide the policy number, company name, and how to lodge a claim. It will enable them to act swiftly if anything untoward happens.
Give True and Full Details: Give accurate personal, medical, and travel information while purchasing the policy. Concealing or providing false information can result in rejection of claim at a later stage.
Have Documents Ready: Keep your vital documents such as passport, visa, medical history, and policy document in a secure and accessible location. Inform your nominee where you have kept these.
Update Contact Information: Ensure that your latest mobile number, email address, and address are with the insurance company. They will be able to contact you as and when required.
What if the Claim is Delayed or Rejected?
Sometimes, claims get delayed or rejected. Here's what you need to do:
- Regularly follow up with the company
- Request reasons in writing if the claim is delayed
- Take the issue to senior management in the company
- If not satisfied, you can make a complaint to the Insurance Ombudsman or IRDAI (the insurance regulator in India)
They will investigate the case and settle the issue.
In Conclusion
Term insurance purchase is a wise decision, whether you are in India or foreign. It gives you the peace of mind that your family will not endure financial hardship after you are gone.
If you are an NRI, it's simple to purchase term insurance in India and your family can also claim it with ease. All you need to do is follow the steps, have your documents in order, and be truthful to the insurance company. If you have the right policy and planning, your family is always safe—regardless of where you are in the world.
