Things NRIs need to Know Before Buying Health Insurance in India

• ●Residing or living in the country for fewer than 182 days in a normal financial year, or
• ●Has gained productive employment or a job outside the country, or
• ●Has been living out of the country for the purpose of their business or vocation in a foreign country, or
• ●Has been living outside of the country for any other reason, while the intention of coming back to India is not certain.

It would be natural for an NRI to consider purchasing health insurance in India as their stay in the country is either limited or uncertain. Would it be a better option to opt for health insurance in the foreign country of residence or purchase a policy in India in order to be completely secure? Many NRIs leaving the country to settle elsewhere face this dilemma.

Guidelines to be Kept in Mind Before Purchasing Health Insurance

Before diving into any decision, it would be wise to look into the following considerations -

1. Length or Approximate Months of Stay in the Foreign Country - The decision to buy health insurance must depend on the NRI’s length of stay in the foreign country. It would be wise to buy health insurance in both countries in case the stay is short, lasting for say, 3 to 4 years. This will ensure the costs of hospitalisation are taken care of.

   Continuing to pay the premium of an already purchased health insurance in India is also a good option in case one has already purchased it before leaving the country. This is because generally it takes around 2 to 4 years for any illnesses to be covered under Indian health insurance. Hence, by the time one has moved back to India, the benefits of the health insurance can be immediately realised and the respective claims can be collected. 

   However, in case the NRI is not intending to return to India for a duration longer than 4 years, it would be much wiser to purchase health insurance in the foreign country of residence instead of India, as the latter would unnecessarily be a liability and a waste of funds as insurance would most probably not be availed in India.

2. Moving with or without the family - Consider if in the near future the entire family will be moving with the NRI stationed abroad. In case all the family members are going to be permanently shifted to a foreign country, one can let go of purchasing health insurance in India. However, in case the family is going to stay back in India while the NRI leaves to work abroad, continuing with the family health insurance plan is a good option as it will cover the health expenditure of the family members in India.

    

3. Checking the Application of the Indian Health Insurance Policy - Before purchasing any health insurance policy, check whether the benefits of the policy apply only within India or to certain countries or globally as well. Several policies are exclusive to India, indicating that if any untoward health incident were to take place in a different country, the policy would not cover the charges.

On the other hand, upon research a suitable policy can be found which may have a higher premium but the claims can be collected in the destination foreign country as well. One must keep a watchful eye on whether there exists a limit or cap to the extent of coverage that is being offered, or if there are any conditions to the diseases being covered under the policy. One policy that exists for coverage in the United States of America may include only severe medical emergencies such as transplantation of organs or cancer treatment, however excludes the hospital charges prior to and after hospitalisation.

Therefore, each insurance policy must only be invested in after understanding its nitty-gritties and nuances in its entirety. If the investment is going to be long-term, one must know thoroughly what they are going to be signing up for.

What are the Tax Benefits for NRIs?

Several tax benefits exist for NRIs investing in health insurance in India. The general trend seen among NRI is to invest in either real estate property in India and rent it out for additional income, or other financial assets which accrue interest and dividends - all these sources of income are subject to income tax in India.

As per the Income Tax Act (Section 80 D), by purchasing health insurance and paying premium under the same, NRIs can apply for income tax rebates and benefits, as follows -

• ●By purchasing health insurance cover for the self (NRI) and family members, ₹25,000 can be saved on the premiums paid in a year.
• ●The same amount can be saved if insurance is being purchased by the parents (up to the age of 60) of the NRI.
• ●In the case of parents of the NRI aged above 60 years, ₹75,000 can be claimed on the premiums that are paid for the insurance policy.

Conclusion

Therefore, the key aspect to consider here is the place of settlement of the NRI. In case he or she intends to return to India, opting for health insurance in the country makes sense. Otherwise, if the plan is to settle abroad with the entire family and seldom visit the country, purchasing Indian health insurance would be deemed as a waste of funds. The goal is to consider where is the highest likelihood of having to claim the benefits of the insurance policy - India or the foreign country of residence.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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