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A Comprehensive Brief for the NRIs Seeking Health Insurance in India

Published On Apr 05, 2019, Updated On Dec 04, 2020

Nowadays, people travel abroad and reside there for a certain period of time, quite frequently. Many go due to business visits while several people are sent on deputations through their employer or company. However, what is common in them is that they don’t plan to reside there permanently and seek a return in a few years. Thus, here is a brief for NRIs seeking health insurance in India

The most common and general concern of NRIs comprises that if they can achieve health insurance or can they pay the premiums through foreign currency and so on. In addition to these, they are also worried due to their lack of knowledge pertaining to the policy coverage, beneficial features, tax provisions, etc. Therefore, here in this article, every section related to health insurance in India for NRIs will be covered. 

Are the NRIs eligible to get a health insurance plan in India?
The straight answer is yes. An NRI is qualified to buy a medical coverage plan in India by simply presenting an address proof, a copy of ITR, and other related documents. While in the case of PIOs (Persons of Indian Origins), they can be offered a health plan by providing an Indian passport and relevant documents. 

Own a comprehensive understanding of policy details 
One should go through the policy wordings of some famous insurers in India to understand the terms and conditions of the plan thoroughly. Actually, a majority of the medical coverage policies accompany a provision of 'geological confinements' or ‘geographical restrictions’, which shows that the policy won't be covering any cost of the policyholder outside India. If you live in the USA and look for medical supervision, the insurance agency in India won't cover you for the costs acquired. However, due to competition, some insurance agencies in India now have begun covering their policyholders outside India also, only for critical ailments and procedures such as a brain tumour, cancer, organ transplant, and so on.

A few underwriting guidelines for NRIs 
The insurance agencies are intended to manage the risks and thinking about this, they possess characterized rules composed for NRIs, which one needs to follow at the time assessing and purchasing any policy. According to insurance providing firms, NRIs are considered more vulnerable than the general population dwelling in India due to the obstacles of corroborating facts at the time of seeking a claim and battle to ascertain the credibility of the same when individuals reside abroad. This is the reason most insurance firms rejects the claims made by the NRIs. The individuals who do cover such circumstances, clearly have a limited sum insured with unbending terms in the context to get the health checkup in India, etc.  

Regulations of Foreign Exchange Management Act 
When it comes to having a health insurance plan, NRIs should go through the segments of the Foreign Exchange Management Act (FEMA) that administer health insurance plans. According to the Management (Insurance) Rules, 2000, where regulation 3 expresses, that an Indian inhabitant may purchase or proceed with an existing plan from a foreign insurer when he or she used to be a resident of an outside nation. However, concerning the issue of purchasing health policies from Indian insurers, the policyholder can be repatriated the amount of the claim outside India to the extent of the premium paid in the foreign currency.

Can NRIs avail the tax benefits under Indian Income Tax Law? 
According to Section 80D of the Income Tax Act, the amount of premium to be paid for medical coverage is exempted from the deductions of tax. This is pertinent to those NRIs as well, who can avail this feature similar to a resident. According to this Act, a policyholder with an individual health insurance policy can claim for an exemption in tax up to a premium of Rs 25,000. But, if you are owning a policy for your parents who are not senior citizens, the tax exemption limit will be up to Rs 25,000 and Rs 50,000 in case your parents are senior residents. Thus, u/s 80D is a policyholder holds a tax liability in India and is paying a premium for medical coverage, he or she can utilize the tax benefits.

What an NRI should pursue if planning to return to India?
If you are an NRI and planning to arrive in India after 3 to 4 years, then you must avoid purchasing a health plan in India. It’s better for you to continue with the insurance agency in the nation where you're dwelling now. But, if you can return within 3-4 years, drop the idea of owning a health plan in abroad and opt for a policy in India, considering all the terms and conditions of the scheme and your requirement.  
The major reason behind purchasing the plan this early is that with it you can dodge the pressure of selecting and buying medical coverage as soon as you arrive in India. In addition, the provision for a waiting period, i.e., around 2-4 years, can also be easily served while you're still abroad, which will make you qualified to claim your plan during a medical emergency when you are back.

What if someone, equipped with health insurance in India, getting transferred abroad?  

Again a similar suggestion is available, as in the above-discussed case, which states that if you're sure that you will be coming back to India, after a specific period, while moving to another country, it’s prudent to proceed with the medical coverage that you have already purchased in India, rather purchasing another policy in the new country. But, if your stay is going to be long and you're very certain of it, you shouldn't proceed with the health insurance plan in India.

For such situations, it's better to purchase another policy in the new country and utilize its advantages. The fundamental purpose behind it is that the geographical clause of the health plan may not allow you to avail it successfully. In this way, don't let your migration affect your savings badly, and plan early to save them as more as possible. 

In short!
To have a health insurance policy is essential for everyone, but while leaving the country, it becomes crucial to plan it accordingly. NRIs have several queries related to the insurance policies where they don’t understand as to shun the scheme or retain it. Here are mentioned some benefiting and relevant solutions in reference to those questions. Go through the above-discussed points to help yourself utilize the policy to the fullest, either being in the country or away.

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