A guide for NRIs seeking health insurance in India!

Foreign Exchange Management Act Regulations, tax benefits, step-by-step process, how is it different from residents Non-Resident Indians, or NRIs in short, often invest in different avenues in their home country India. They use these avenues for planning their financial portfolio and also to claim tax benefits on their income. Many NRIs invest in health insurance plans too so that they can get financial security if they face a medical emergency when they are in India. 

Another reason they buy the policy is that their existing health plan abroad might not cover the treatments they take in India. That is why they invest in a health plan in India for covering those medical costs that arise in India. Also, in the case of planned treatments, India offers a cheaper solution than international countries. So, NRIs thinking of taking a planned treatment in India can opt for a health plan to get coverage for the same.

Points to consider

If you are also NRI thinking of investing in a health plan in India, here’s a guide to help you with the same:

a) Eligibility

Yes, you are eligible to buy a health plan in India. NRIs, PIOs and OCIs can buy health insurance plans from Indian insurance companies. 

b) Types of health plans

When it comes to the choice of plans available, there might be restrictions. Insurance companies might limit the plans that they offer to their NRI clients compared to the range of plans available for resident Indians. While you can opt for both indemnity and fixed-benefit health insurance plans, the plan choices might not be as extensive as what resident Indians get.

c) Who can be covered under the policy?

NRIs can buy health plans covering their families, i.e., themselves, their spouse and their dependent children. Moreover, they can also buy health insurance for their parents living in India. 

d) Terms and conditions

Insurance companies might find it challenging to underwrite the medical risks of an NRI individual. That is why there might be certain terms and conditions on the policy. These include the following:

> There are restrictions on the geographical coverage area under each plan. Even plans that offer international coverage might limit the scope of such coverage for NRIs.

> There might be restrictions on the scope of overall coverage features

> You might get a restricted sum insured

> There might be a requirement of a pre-entrance health check-up before the issuance of the policy. You can undertake this check-up in India at the insurer’s networked facility which is usually free of cost. 

> However, if the NRI is not present in India and wants to get the check-up done abroad, it is allowed. However, the NRI would bear the costs of the check-up and would have to send the medical reports to the insurer in India.

> NRIs can pay the premium in INR or in any other foreign currency. However, some insurers might require you to pay the premiums in INR only.

Tax benefit

> NRIs can claim tax benefits on the premium that they pay for a health insurance policy. Here’s how –

> NRIs buying health plans covering themselves and their families can claim a deduction up to Rs.25,000. 

> If the NRI is above 60, the deduction limit increases to Rs.50,000

> Incase the NRI buys a health plan for his parents, he can claim an additional deduction of up to Rs.25,000 on their health insurance premium

> If the parents are above 60, the limit increases to Rs.50,000.

> You can calculate your 80D deductions by clicking on the link here.

How to buy the plan?

Unlike resident Indians, NRIs might not be able to buy a plan from the online marketplace or from the insurer’s website. They might have to contact the insurance company directly to buy the policy. In such cases, NRIs can get in touch with the insurer online or offline and request health insurance coverage. The insurer would specify the policies available, their terms and conditions and the premium payable. NRIs can assess the policies, pick one and buy the plan.

NRIs would also have to submit documented proof of their Indian citizenship. This document can be their passport, income tax return, or any other document that establishes their Indian citizenship.

FEMA regulations 

While the FEMA (Foreign Exchange Management Act) regulations allow NRIs to buy health plans in India and pay for them in foreign currency, the rules are different when it comes to claims. FEMA states that if NRIs wish to repatriate the claim amount received from an Indian insurer, they would be able to do so. However, repatriation is possible only till the amount of premium that you pay as an NRI in foreign currency. A repatriation facility is not available if you pay the premium in the Indian currency.

Why buy a health plan in India?

Buying a health insurance plan in India makes sense only if you plan to return to India in the near future or you frequently visit India and stay here for extended periods of time. However, if you wish to continue staying abroad with minimal chances of returning back, buying health insurance in India would not make sense.

Bottomline

Go through this guide when you are an NRI wishing to invest in a health plan in India. Understand the different tenets of the coverage and then make an informed choice.  Find your perfect health plan with OneAssure.