LIC for NRIs: Everything You Need to Know

LIC for NRIs, FNIOs & PIOs

InsuringGurgaon.com has a dedicated team of LIC experts serving NRIs from the UAE, US, UK, and Australia for the past five years. Our clients benefit from complete online processing, giving them full control over their life insurance decisions from anywhere in the world.

LIC policies help NRIs save on taxes under Indian income tax laws while securing long-term financial protection. Plus, they can access the vast LIC network across India for seamless servicing. If you’re an NRI looking for trusted, tax-efficient, and hassle-free LIC solutions — you’re in the right place.

Why is LIC important for NRIs?

Premium Costs

Country	Term Insurance Premium (approximate for ₹1 Cr / $120,000 for 30-yr-old, 20-year term)
India	₹8,000 – ₹15,000 annually
UAE	₹25,000 – ₹40,000 (AED 1,100 – 1,800)
USA	₹20,000 – ₹35,000 ($250 – $400)
UK	₹18,000 – ₹30,000 (£180 – £300)
Australia	₹25,000 – ₹40,000 (AUD 450 – 700)

Premiums in India are 60–80% cheaper compared to these developed countries.

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📈 Key Differences

LIC Policies for NRIs

NRIs can invest in trusted LIC plans offering life cover, wealth creation, and guaranteed returns. Here’s a quick look at the most recommended options:

✅ LIC Jeevan Utsav

Type: Whole Life Plan (Non-linked, Non-participating)

• Premium Payment: 5, 8, or 10 years
• Coverage: Till age 100
• Payout: Annual income or lump sum from end of PPT
• Additions: Loyalty and Guaranteed Additions

👉 Ideal for NRIs who want lifelong family protection with short premium commitment.

Example: Rahul (35), based in Dubai, invests ₹10 lakhs. From age 45, he receives annual income, and upon death, his nominee gets a lump sum.

✅ LIC Jeevan Shanti

Type: Single Premium Annuity Plan

• Choice: Immediate or Deferred annuity
• Options: Single life or joint life
• Return of purchase price available

👉 Best for NRIs planning fixed retirement income with capital protection.

Example: Priya in Singapore invests ₹30 lakhs. After 5 years deferment, she gets fixed annual pension credited to her NRE account.

✅ LIC Nivesh Plus

Type: Unit Linked Insurance Plan (ULIP)

• Single premium
• Investment in Equity/Debt funds
• Life cover: 1.25x or 10x premium
• Switch between 4 funds

👉 Ideal for NRIs seeking market-based wealth growth with insurance cover.

Example: Amit in the UK invests ₹5 lakhs in Growth Fund. Value increases based on equity performance while family stays covered.

✅ LIC Index Plus

Type: Index-based ULIP

• Premium: Single or Regular
• Investment: Nifty/Sensex Index
• Low fund charges + guaranteed additions

👉 Passive investing for NRIs who want long-term equity exposure with minimal risk.

Example: Sneha in the US pays ₹2L/year. Over 10 years, her fund grows with Nifty index + guaranteed loyalty additions.

🌐 Important Notes for NRIs:

• Pay premiums through NRE/NRO accounts.
• Maturity/claim amounts are repatriable as per FEMA guidelines.
• You can apply online or via Power of Attorney.

LIC POLICIES FOR NRIs – Quick overview

Things to Consider When Buying Life Insurance as an NRI:

1. Check Policy Eligibility:

Before investing in a life insurance policy, it’s essential to check whether the policy is available to NRIs. Not all policies are available to NRIs, and the eligibility criteria may vary from one insurance provider to another.

2. Exchange Rate Risk:

As an NRI, you need to consider the exchange rate risk while buying an insurance policy. The policy premium and the payout are denominated in Indian rupees, and any fluctuation in the exchange rate can impact the premium paid and the payout received.

3. Nomination:

When buying an insurance policy, it’s crucial to nominate a beneficiary who will receive the death benefit in the event of your untimely demise. NRIs should ensure that the nominee is an Indian resident and provide their details, including name, address, and relationship.

4. Policy Repatriation:

In the event of the policyholder’s demise, the death benefit is paid out to the nominee in Indian rupees. NRIs need to ensure that the death benefit can be repatriated to their country of residence without any legal or regulatory hurdles.

5. Tax Implications:

NRIs are eligible for tax benefits on the premiums paid towards life insurance policies. The premiums paid are eligible for tax deductions under Section 80C of the Income Tax Act, up to a limit of INR 1.5 lakh. Additionally, the maturity benefits and death benefits received from an insurance policy are also tax-free.

However, it’s essential to note that NRIs need to comply with the tax regulations of both their country of residence and India. NRIs should consult a tax expert to understand their tax liabilities and the tax implications of investing in life insurance.

Frequently Asked Questions

• Can NRIs purchase LIC policies online?
  • Yes, NRIs can purchase certain LIC policies online, such as the New Tech-Term plan, through the official LIC website.
• What documents are required for NRIs to buy LIC policies?
  • Valid passport, visa/residence permit, proof of overseas address, medical reports, and income proof.
• Are there tax benefits for NRIs investing in LIC policies?
  • Yes, under Section 80C and 10(10D) of the Income Tax Act, NRIs can avail tax benefits on LIC policies.

Conclusion:

Investing in life insurance is an essential step towards securing your family’s financial future, and as an NRI, it’s even more critical to consider life insurance as an investment. With different types of policies available, NRIs can choose the one that best suits their financial needs and goals. However, before investing in a life insurance policy, NRIs should consider the policy’s eligibility, exchange rate risk, nomination, policy repatriation, and tax implications.

It’s always advisable to consult a financial advisor to understand your investment options and the best way to secure your financial future. Life insurance is a crucial investment, and as an NRI, it’s crucial to choose the right policy that provides the necessary coverage and benefits to protect your family’s financial security.

Why NRIs Chose LIC for their Life Insurance Needs

Life insurance costs and structures vary significantly between India and developed nations like the UAE, US, UK, and Australia due to differences in market maturity, demographics, regulatory environments, and economic factors. Here’s a crisp comparison:

1. Premiums & Affordability:

• India: Generally, lower premiums, especially for term insurance. This is attributed to factors like a large number of insurers creating competition, lower operating costs, tele-medical check-ups for NRIs, and a relatively higher number of young people in the population. For instance, term insurance in India can be 50-60% cheaper than in the UAE or Singapore for similar coverage. Tax benefits (e.g., under Section 80C) also make premiums effectively lower.
• UAE, US, UK, Australia: Higher premiums are common. This is due to factors like higher cost of living, more stringent regulatory requirements, potentially older populations, and more developed healthcare systems that might influence mortality rates.

2. Product Focus & Types:

• India: Historically, there’s been a strong inclination towards savings-linked products (e.g., endowment plans, ULIPs) alongside pure protection. However, pure term plans are gaining popularity, especially among NRIs. Products often offer long-term coverage, sometimes up to 100 years.
• UAE, US, UK, Australia: A greater emphasis on pure protection products like term life insurance. These markets also offer a wider range of specialized products like whole life, universal life, and various riders for critical illness, disability, and income protection, often with more sophisticated features and customization.

3. Regulatory Environment:

• India: Regulated by the IRDAI (Insurance Regulatory and Development Authority of India), which aims to protect policyholders and promote industry growth. The regulatory framework is evolving, with recent changes impacting surrender values and promoting higher refunds for policyholders.
• UAE, US, UK, Australia: Each country has its own robust regulatory bodies (e.g., DFSA/CBB in UAE, state-level departments/NAIC in US, FCA/PRA in UK, APRA/ASIC in Australia). These regulations often focus heavily on consumer protection, solvency requirements for insurers, and transparent disclosure, and may have more established guidelines for product design and distribution.

4. Market Penetration & Density:

• India: Lower insurance penetration and density compared to developed countries. While life insurance penetration in India is higher than the global average, overall insurance penetration remains relatively low, indicating significant growth potential.
• UAE, US, UK, Australia: Generally higher insurance penetration and density, reflecting more mature and well-established insurance markets.

5. Underwriting & Data:

• India: Underwriting practices are improving, but historical mortality data might be less precise than in developed nations. Tele-medical check-ups are increasingly common for NRIs.
• UAE, US, UK, Australia: Benefit from more extensive and accurate demographic and mortality data, leading to more refined underwriting practices and potentially better risk assessment.

6. Claim Settlement Process:

• India: Efforts are being made to streamline the claim settlement process, and many Indian insurers boast high claim settlement ratios. For NRIs, having an Indian insurer can simplify the claim process for beneficiaries living in India.
• UAE, US, UK, Australia: Generally, well-established and efficient claim settlement processes. However, for international policyholders, claiming can sometimes involve more administrative hurdles if the beneficiaries are in a different country than the insurer.

In essence, while life insurance in India offers a cost-effective solution, especially for those with family ties to the country, developed markets provide a broader array of sophisticated products, often with more established regulatory frameworks and data-driven underwriting, albeit at a higher premium cost