No matter where you live, health insurance has become an absolute necessity. Today, it's common for people to move abroad in search of better opportunities. However, to make the best choice, one must consider the implications of policy features, legal requirements, and tax laws when purchasing a financial product like health insurance in India. The commotion includes a lot more for NRIs (Non-resident Indians).
NRIs' most frequent and widespread worry is whether they can obtain health insurance or pay the premiums in foreign currency, among other things. In addition to these issues, they are also concerned about their ignorance of the policy's coverage, benefits, tax provisions, etc. All sections of health insurance for NRIs in India will therefore be covered in this article.
Eligibility for NRIs
Before getting started with the details, knowing whether NRIs are eligible for health insurance in India is essential. The simple answer is yes. An NRI can purchase a medical insurance plan in India by providing an address confirmation, a copy of his/her ITR, and other pertinent documents. On the other hand, persons of Indian origin (PIOs ) can receive health insurance by presenting an Indian passport and other required documents.
To apply for an insurance policy, you, as NRI, must submit a properly completed proposal form and supporting documents. It may include an attested copy of your passport, a copy of your Pan card, information about your Indian bank account, and any other details the insurer may require. The policies are issued after the procedures are complete, and only Indian rupees are accepted as payment for future transactions.
When Should an NRI Purchase Health Insurance?
Choosing individual health insurance before the age of 45 is advised. However, some additional factors influence whether or not one should choose health insurance in India. You will have to think about-
1. How long do you plan to stay in a foreign country?
2. What time would you anticipate returning?
3. Where is your family’s residence?
4. Is your family planning to relocate to India or another country soon?
5. When are you or your family planning to arrive back in India?
It is a no-brainer if you are already abroad or traveling abroad with the possibility of returning to India in 2 to 3 years. You will have to purchase NRI life insurance or health insurance in India. Even though it will cost money, many illnesses' waiting periods will be finished by the time you get back.
You can purchase family floater insurance policies if you have family members in India who are financially dependent on you or older people who might find it challenging to obtain health insurance. Avoid purchasing health insurance in India if you and your family live abroad for longer than 4-5 years. In that case, purchasing it in the resident country is preferable.
List of Factors to Consider
The following things need to be taken into account if you are an NRI before choosing to purchase a health insurance policy:
1. Underwriting Guidelines
Before issuing a health insurance policy, insurers assess based on their medical history to determine whom to cover and the premium rate for the policy. This is underwriting.
2. Application
It is essential to comprehend the terms and conditions of a specific plan before subscribing to a health insurance policy coverage. Sometimes, certain nations are excluded from the global health coverage offered by Indian businesses. Therefore, knowing whether complete coverage is offered in the country you visit is preferable.
3. Coverage Scope
A few insurers on the market only offer global coverage for a select group of critical illnesses. They might not offer sufficient reimbursement for ordinary hospitalization abroad. Therefore, before enrolling in a particular global health insurance plan, it is important to consider its coverage scope.
4. Coordination
In some circumstances, communication between an Indian health insurer and a foreign provider of medical services may not be successful. Furthermore, your illness or injury may make it difficult for you to manage coordination. Therefore, to ensure a speedy claim settlement if you plan to stay for an extended period, it is preferable to choose the local health insurer of the host nation.
5. FEMA Rules
The Foreign Exchange Management Act includes a few provisions related to NRIs' access to health insurance. The Act permits NRIs to maintain foreign-issued insurance policies while they are present in India. In addition, this Act allows the insured to receive the claim amount in foreign currency into their bank accounts for global coverage by Indian insurers.
6. Tax Benefits
According to section 80D of the Income Tax Act, even the health insurance policies purchased by NRIs are eligible for an income tax benefit. Regarding insurance policies, the deduction level can be applied according to the specified level. Therefore, you can still claim tax benefits even if you are an NRI who pays your parents' insurance premiums in India.
For the individual, spouse, and dependent child policies, a deduction of INR 25,000 is available. INR 50,000 for policies covering parents over 60 and INR 25,000 for those under 60. Last, INR 50,000 if the primary proposer is older than 60.
Conclusion
Your health insurance plan in India won't be helpful to you if you move to another country unless it offers global health coverage benefits. Therefore, it is best to plan based on the factors mentioned earlier. If you are unsure of the length of your trip, you can start with an international travel insurance policy from an Indian company and add more coverage as needed.
Always take the time to read and comprehend the policy document's terms and conditions to ensure that you don't miss any provisions, particularly those pertaining to geographic restrictions. Then, only purchase a plan after being entirely sure.
