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Understanding Health Insurance for NRIs in India

Team AckoApr 12, 2022

The world has become a global village thanks to technological advancements, digital and otherwise. Yes, the COVID-19 pandemic has restricted the frequency of travel, but people still and will continue to move across countries and continents. Some do it as a part of their work, while some do it for personal reasons. Whatever the reason to travel, one must be covered under health insurance. But where does this leave Non-resident Indians (NRIs)? Read ahead for the answer, as this article focuses on health insurance for NRIs in India.

Health insurance for NRIs

Health insurance for NRIs

If you are an NRI and thinking of visiting India, then you must have some sort of health insurance coverage to ensure financial support in case of a medical emergency. Whether you want to purchase it for the short term or a long term is up to you and your travel plans.

Health insurance for NRIs is a category based on the legal residential status of the person willing to get insured in India. There can be legal and tax implications to this; therefore, one must strictly adhere to the stated documentation process while buying or renewing and raising a claim against this policy.

Importance and benefits of choosing medical insurance for NRIs

Here’s why it is crucial for NRIs to be covered under a health insurance policy purchased in India.

  1. No geographical restrictions

    Health insurance policies often come with geographical restrictions. If you already have a health insurance policy in your country of residence (for example, USA), it might have no or limited coverage outside of its geographical limits. However, when you purchase health insurance in India, you will not have those geographical limits and can avail of insurance coverage throughout the country (India).

  2. Adequate coverage

    As an NRI, you might be vulnerable to certain health issues while visiting India. For example, flu-related issues or stomach-related issues. If you purchase a health insurance policy in India, you can avail of adequate coverage as per your requirements. For example, opting for a high sum insured along with a Personal Accident Cover.

  3. Hassle-free claim settlement

    In case you face medical issues and need to raise a claim, settling it with an India-based insurer (for example, ACKO) is likely to be more streamlined compared to the one based in a foreign land. This is if you are covered by their policy in India. For example, with an India-based insurer, you can directly avail of cashless claims as they will have tie-ups with several hospitals. Thus, the process will be hassle-free. However, the same might not be possible in the case of a foreign-based insurer, as there will be a lot of communication, documentation, inspection, etc., which can be time-consuming.

  4. Tax benefits

    Purchasing a health insurance policy not only offers financial support for covered medical issues but also offers tax benefits. You can avail of tax benefits under section 80 D of the Indian Income Tax Act for purchasing health insurance in India. This provision is related to reducing the tax liability for taxable income in India. The exact benefit will depend upon the premium and the tax benefit slabs for the financial year.

  5. Continuous coverage

    If you are an NRI who frequently travels to India, then opting for a health insurance policy in the country will help you with continuous coverage throughout the policy period. For instance, if you buy a policy with a coverage period of two years, you don’t have to worry about buying insurance every time you visit India during those two years.

  6. The waiting period advantage

    Some health insurance policies need you to complete a waiting period before you can raise a claim. This is usually applicable in case of pre-existing diseases that exist while purchasing the policy. If you are an NRI who plans to come back to reside in India permanently after a few years, then buying a health insurance policy at the earliest will be helpful to meet the waiting period requirement. This way, when you return to India for good, your waiting period will have been served.

How can NRIs (Non-Resident Indians) apply for health insurance in India?

The process for purchasing NRI insurance can vary from one insurer to another. Also, the process might not be as straightforward as it is for a resident Indian, where the resident can directly buy an online health insurance policy via the insurer’s website or app without documentation.

Here’s an overview of the application process.

  • Step 1: Get in touch with the insurer via website/app/call/email.

  • Step 2: Meet their criteria by submitting required documents such as Passport number, Permanent Account Number (PAN) details, etc.

  • Step 3: Select a plan of your choice.

  • Step 4: Undergo medical tests required (if any) by the insurer.

  • Step 5: Pay the applicable premium.

  • Step 6: Receive the policy.

  • Step 7: Verify the details and get them rectified if there’s an issue.

Are NRIs eligible to purchase a health insurance policy in India if they are already covered under a policy?

Yes, NRIs can purchase a health insurance policy in India even if they are covered under some policy in their country of residence. Some NRIs might be insured by their employers or might have a wide-ranging policy offering domestic as well as international coverage (with limitations). Even in such a scenario, NRIs can opt for a health insurance policy in India for enhanced coverage.

NRI health insurance and Foreign Exchange Management Act (FEMA) regulations

If you are an NRI looking to avail of health insurance in India, you need to adhere to the Foreign Exchange Management Act (FEMA) regulations.

Here’s what it mainly deals with.

  • Provision to hold health insurance policies offered by the insurer in the country of residence. 

  • Guidelines regarding the repatriation of claim amount in foreign currency.

Also, read; One Crore Health Insurance Plan

Buying health insurance for Non-resident Indian parents in India

If you are buying health insurance for NRI parents who will be visiting or moving to India with you, then consider the following points for making an informed decision.

  1. Coverage

    Opt for a policy that offers maximum coverage in terms of the sum insured and the policy features. For example, the policy should not only be focused on hospitalisation but also cover pre-hospitalisation and post-hospitalisation expenses.

  2. Age

    Usually, the higher the person’s age, the higher the insurance premium. Keep that in mind while insuring your parents. Don’t compromise on the overall policy features just because they might seem to demand a higher premium, as the age factor plays a huge role in the high cost.

  3. Pre-existing diseases

    In the case your parents have pre-existing diseases, make sure to inform the insurer about the same. This process usually happens during the policy purchase journey. Also, pre-existing diseases are usually covered by the insurer after the insured person has completed a waiting period.

  4. Payable premium

    The payable premium will be decided upon by several factors such as the parents’ age, health condition, type of policy chosen, etc. The amount is usually lower in the case of a long-term policy as compared to a short-term policy.

  5. Network hospital

    Before buying a policy, make sure that the insurer has a wide range of top-notch hospitals in its network. This is crucial as admitting the insured person to a network hospital helps to settle claims in a hassle-free manner. As there’s an understanding between the insurer and the hospital, the claims raised are settled in a cashless manner (directly between the hospital and the insurer).

Medical insurance policy for NRI senior citizens

The crucial point to note while insuring NRI senior citizens is to purchase a dedicated policy (Individual Health Insurance Policy) for them instead of including them in a group cover such as a Family Floater cover. If you want to include them in a group cover, make sure the sum insured is substantial, for example, Rs. 1 crore.

Income Tax deduction on health insurance plans

If you purchase health insurance in India, you are eligible for a tax deduction as per the prevailing Income Tax guidelines. Therefore, buying health insurance can help you save tax.

Can NRIs save tax through health insurance bought in India?

There are tax benefits for NRIs if they purchase health insurance in India. This is applicable in case the policy is purchased in the country for an individual as well as for parents.

Is there any difference between a Health Insurance Policy for NRIs and a Mediclaim Policy for NRIs?

Usually, the term Mediclaim pertains to insurance coverage in case of hospitalisation. Whereas the term Health Insurance can also offer insurance coverage before and after hospitalisation and not just during hospitalisation. However, health insurance for NRI and Mediclaim for NRI might be used interchangeably in some cases for basic plans. Thus, it’s best to discuss the coverage with the insurer before purchasing either policy.

When should an NRI not buy a health insurance policy in India?

For an NRI, it’s better to be covered under some sort of health insurance purchased in India while in the country. However, in certain situations, it might be okay to not purchase a health insurance policy in India. Here’s a list of such situations.

  • If the health insurance policy purchased in the country of residence offers extensive coverage even in India.

  • If you are visiting India only for a few days and your travel insurance covers health-related risks.

  • If you are certain that you will not be returning to India permanently anytime soon.

Key takeaways

Here are some important things to remember that were covered in this article.

  • NRIs should be covered under at least one type of health insurance policy when they are in India to ensure financial assistance.

  • NRIs can purchase a health policy for themselves as well as for dependent parents and avail of corresponding tax benefits as per The Income Tax regulations.

  • It’s better to buy health insurance in India to ensure hassle-free claim settlement.

  • It’s better to purchase health insurance in India if you plan to permanently settle in the country after spending a few years in a foreign land.

  • NRIs can skip purchasing health insurance in India if their existing health insurance cover offers extensive health insurance coverage even during their stay in India.

Frequently Asked Questions (FAQs)

Here are some FAQs related to NRI health insurance in India.

Can an NRI purchase an Individual Health Insurance Policy in India?

Yes, an NRI can purchase an Individual Health Insurance Policy in India depending upon the terms and conditions put in place by the insurer offering the policy.

Can an OCI buy medical insurance in India?

An Overseas Citizen of India (OCI) can buy medical insurance in India as per the prevailing terms and conditions.

Which section of The Income Tax Act do I have to meet to be declared as an NRI?

You need to meet the requirements stated in section 6 of The Income Tax Act to be qualified as an NRI.

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