Health insurance is a necessity and one should have health coverage irrespective of the country they are residing in. NRIs currently residing outside India but planning to come back some time also have the option of purchasing health insurance products in India and enjoying its benefits once they are home. And here’s everything they need to know about purchasing the same:
1) What are the documents necessary for purchasing health insurance?
An NRI is eligible to purchase health insurance in India on the submission of a duly filled proposal form and documents including attested copy of passport, copy of pan card, details of the bank account in India, ITR, and any additional information sought by the insurer. Currently, the payment accepted by the insurers for the payment of premiums is in Indian rupee.
2) When should one look to buy a policy?
As an NRI, you should get a policy in India if you are planning to return within 3-4 years. This would help you go past any waiting period that the policy may have. If you are not planning to return within this time frame then it is better to continue with the policy you have in your current country of residence. Also, if you had a policy and are now looking to relocate to a foreign country for a limited time, then it is advisable to keep paying the premiums and renewing your policy.
3) Underwriting issues for an NRI
Insurers consider NRIs at a higher risk, in terms of underwriting, because of numerous concerns. The medical cost in your current country of residence, the fluctuating exchange rates, the different medico-legal hurdles between inter-country medical support, etc., makes insuring an NRI a riskier bet. The simple fact that verifying your claim from a different country could be really tough, makes the insurers wary. Quite often, the insurance seeker has to undergo thorough medical checkups and receive tougher terms and conditions if they wish to be insured.
Geographical restriction is another clause that you should read thoroughly before purchasing a policy. There may be certain countries that an Indian insurer may not cover or there could be certain illnesses only that are covered. Certain insurers may not cover your claim if you are in America but may do so if you are in Bhutan, for example. Keep in mind your current residence and clauses that relate to the country before deciding upon a policy.
4) What is the most important government regulation on this matter?
Insurance policies for NRIs are managed under the Foreign Exchange Management Act (FEMA). It says that a person resident in India can continue to hold any policy issued by a foreign insurance company, provided the person has obtained prior permission of the concerned Indian authority at the time of its issuance. Also, a person can purchase a policy in India (for NRIs) and the claim amount (generated in another country) can be sent to them by the insurer in foreign currency. Essentially, it allows you to reap the benefits of health insurance in India on following simple guidelines.
5) Do NRIs get tax benefits on purchasing health insurance?
Yes, in terms of tax benefits, NRIs enjoy the same advantages as resident Indians under section 80D of the Income Tax Act. A policyholder is eligible for a deduction of Rs 25,000 for premiums and if their parents are also covered under the same plan, they can avail an additional deduction of Rs. 25,000. If the parents, however, are above 60 years of age, the additional deduction can be upto Rs. 50,000.
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