A Handy Guide for NRIs Seeking Health Insurance in India

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The India diaspora, NRIs as we like to call them, is spread across the world in many countries where they have been creating good name for our country with their hard work and dedication. However, for most of these people, their roots are still in India in the form of family, relatives or just the plain simple love for one’s country. As a result, a large number of NRIs come to India every year to connect back with their country and their roots. Among other things, they have to also ensure their well-being. Given that they have spent most of the time in foreign land, understanding Indian healthcare plans could be a daunting task for many. More so being able to map their requirements with the various plans on offer in India.

Are the NRIs eligible to buy a policy in India?

This would be the first question in any NRIs mind who is thinking of getting a health insurance for herself or himself in India. And the answer is Yes, they are. However, they have to submit some documents to avail Mediclaim for NRIs in India. The list of documents should include proof of residence, along with an ID proof and ITR. However, being someone who will also spend a considerable time out of India, NRIs should also pay close attention to terms and conditions, specifically around ‘geographical restrictions’ that limit the number of countries in which their health insurance policy will cover for them in case the need for it arises.

Let us understand this situation with an example. Suppose, you are an NRI residing in the USA, and during your recent trip to India, you purchased a health insurance policy. Now, if the policy has the clause of geographical restriction, then you will not be able to avail its benefits once you go back to the USA. So, if you are spending only a few months in India, there is no point in buying such a policy. It will be useless for you. However, some insurance providers in India have started offering policies that remain valid even outside India. Again, you may find some limitations in such policies. They might not cover expenses related to the treatment of illnesses like cancer, brain tumour, organ transplant, etc. Therefore it is advised that any prospective NRI buyer of health insurance does get clarity on this before finalizing any Mediclaim plan.

More about the guidelines for NRIs

NRI buyers of health insurance would observe that the sum insured for them tend to be on the lower side for a certain premium, or in other words, for the same cover amount NRIs have to pay higher premium compared to people residing in India.

To understand this, we need to look at the issue from the perspective of health insurance providers. The best health insurance companies have a very clear set of guidelines that define the scope and validity of the policy for the NRIs. For insurance companies, NRI customers are apparently riskier in comparison to the people living in India. In the case of NRIs, there are many hurdles when it comes to corroborating facts related to the claims made. The lack of authenticity proves to be a major issue for the insurers. For this reason, even the best insurance companies do not cover or have very limited coverage for claims made outside India.

In addition, insurance companies consider the NRIs to be more vulnerable to health risks. As a result, the amount of sum insured in their case tends to be a little on the lower side. Besides the sum insured, they also need to be aware of the regulations related to FEMA (Foreign Exchange Management Act). It does have an effect on insurance policies. As per this act, if an NRI buys a policy from an Indian company and then goes back to the foreign country, then the claim made by him during his stay in the foreign country will be accepted; however, the claim amount will be calculated according to the premium paid in the foreign currency. So, as long as you are in India, the process of making a claim can be quite easy for you.

Can NRIs avail tax benefits under the Income Tax law of India?

According to Section 80D, even NRIs are eligible to get these benefits. If you are an NRI, your health insurance premium will be considered for tax deductions. Section 80D says that an individual having a health insurance plan with a maximum premium of INR 25,000 is eligible to get a rebate on his income tax. It applies in the case of senior citizen health insurance plans as well. In case you have any plans of getting back to India within the next three or four years, it is better to buy a health insurance policy from India, and get the advantage of Section 80D. If there is no plan to visit India in the next three years, there is no point in buying a health plan from India.

So, those were some of the useful pieces of information related to health insurance policies for the NRIs. Having a health plan in India is certainly a wise decision, particularly if you visit India every year. But, when you buy one, you must ask the agent clearly about the sum insured and the sub-limits of the policy. You would never want to buy a policy that does not serve any real purpose at the time of medical emergency. Hence, choose wisely.