Almost all of us work towards securing a financially strong future for our loved ones. No matter how noble the aim might be, there are a lot of uncertainties that life can throw at you. Having a solid back up plan for such instances will ensure that your loved ones will not be impacted by such situations. Buying a life insurance is an ideal way of tackling such scenarios. The central motive of buying a life insurance is to provide financial stability to your family members in your absence. This ensures that they can continue with their lives without having to worry much about earning.
When it comes to serious issues such as life and death, it doesn’t make a lot of sense to demarcate people based on their area of residence. This is the very reason that Indian citizens who stay out of the country can also buy a life insurance policy to secure their future. The following are the two primary ways in which an NRI or Non Resident Indian will be able to buy a life insurance.
- Insurers provide an option for NRIs to purchase a policy from the country of their residence via Mail Order Business. A notary, an Indian diplomat and an employee of the Indian Embassy are required to sign off on the documents before the processing.
- When the individual is on a visit to India, he or she can purchase the policy. The insurer will then process the application and complete all the underwritings. The policy will then behave like a policy purchased by any other residing citizen of the country.
Post this, a policy would be almost identical when compared with the ones bought by current residents of the country. For an instance, when it comes to a term insurance, the general term available for an NRI is between 1 year and 25 years. The minimum entry age or upper limit on age remains the same for NRIs as well.
Most of the insurer offer a sum assured in the range of INR 2, 00,000 and INR 1 Crore. As is the case with any other policy, it is a bit difficult to gauge the insurance premium. The simple reason is that there are a lot of parameters that come into the picture such as the term of the policy, the sum assured that a person has opted for, the frequency with which they wish to pay the premiums, and the riders that they have opted for the policy. Similar things are applicable for other life insurance policies for NRIs as well.
Life Insurance for Students
Though you will be able to find a few life insurance providers for students, the options aren’t galore. The primary reason is that a life insurance policy is designed to secure financials of a working individual. You will be able to buy a life insurance for students but the cover might not be to the tune of what a working individual is entitled to.
Different Categories of Life Insurance
One can think of life insurance as an umbrella of products. Thus, it is only obvious that it is split into a variety of products. The following is a list of products that you will be able to buy as a life insurance along with a brief description of the same.
- Term Life Insurance
This is the most vanilla form of insurance. This policy does not have different components rather just concentrates on providing you with life cover. The entire premium that you pay is used to buy a life cover for you. This enables the policy to provide massive life cover by paying affordable premiums.
- Whole Life Insurance
This policy aims at providing a policy holder with life cover and death benefits in the event of demise. For a whole life insurance, a policy holder would typically pay premiums till he or she is alive. On their death, the nominees of the policy will receive the proceeds of the fund. The benefit of the plan is that there is no fixed term. The policy holder pays the premiums as long as he/she is alive.
- Money Back Policy
A money back policy is a variation of an endowment plan. As the name suggests, the plan has regular payouts that a policy holder receives on the completion of certain milestones. The policy still remains active and on maturity the policy holder receives the remaining sum assured.
- Endowment Plan
The major difference between an endowment plan and term plan is that the former pays on both death as well as survival. A policy holder is also entitled to other bonus and other payouts in the case of endowment plan.
Irrespective of where you are a student or NRI, it is advisable to buy a life insurance to keep at bay any unwanted situations.