No change in benefits if the Life Insurance policyholder becomes NRI
Life insurance has been a traditional investment preference in India, and most Indians prefer to hold at least one life insurance plan. If you are a Non-Resident Indian, you may have purchased an LIC policy while you were a Resident Indian or you may be planning to buy one as an NRI.
Let’s take a look at the FAQ relating to buying life insurance in India.
I will be shifting to Malaysia this year. As an NRI should I proceed with my life insurance plans? I have a money back plan and a term plan which will mature only in 2030.
Definitely yes – especially if the plans continue to meet the requirement for which you had purchased them in the first place. There will be no variation in the benefit of the plans while you live in Malaysia, so as long as you pay your renewal premiums on time.
I am NRI and was planning to get an LIC policy and experienced the medical tests. Although later I decided not to go ahead with it. Will I get back the funds I paid for the medical tests?
As a process, insurance firms take the premium from its customers and after that, arrange for medicals as a part of the overall LIC policy issuance process. In this situation, if you have paid the money instantly to the diagnostic centre for the medicals, it will not be possible for them to affect a refund for the tests conducted.
My nominee on my life insurance plan is my elder sister as I had bought it before the wedding. But, now I want to make my wife my nominee. However, I also want to leave some money for my sister. Is it better to gift her some funds and make my wife my single nominee?
In an LIC policy, it is possible to have multiple nominees, while precisely defining the benefit distribution split amongst the multiple nominees. In your specific situation, I would advise that you make, both your wife and sister, nominees in your existing policy. The percentage of profit distribution may vary depending on how much you want to leave behind for each of them.
Can I buy insurance in the name of my granddaughter’s? Should I get a child plan or endowment plan? I want her to take money when she is 18 years so that she can utilise it for her college education. She is 5 years old presently. Moreover, if I am not able to continue paying the instalments for the whole term can her parents continue with the Policy?
Yes, you can buy a life insurance plan in your granddaughter’s name. You have not mentioned your age. But, assuming you are over 60, it may be difficult for you to be the life assured. Hence, I recommend you buy a plan wherein one of her parents is the person insured, and you are simply the policy premium payer. Yes, parents have the option to continue paying the premium in your absence.
There are a number of child plans and endowment plans available in the Indian context, and I would suggest you understand the product features, before zeroing in on the specific plan.