Insurance companies in India offer customized solutions for Non-Resident Indians (NRIs) who are keen on buying a life insurance policy in India. However, before you purchase a policy, it is important to understand the NRI policy guidelines and then make a decision. The payout regarding maturity benefit, death benefit, or during the term of the policy will be based on the NRI insurance settlement guidelines. When you have an understanding of the payout guidelines, you can make a better decision about choosing the right type of policy for your needs.
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Determining your policy payout
The policy payout for your policy will depend on the type of life insurance policy you have.
Type of policy payouts
You have the facility to choose from the different types of policy payout options. Based on the type of life insurance policy that you have, you can choose from the three different payout options. The payout amount will be directly credited to the bank account and the payment will be made only in Indian Rupees. The payout options include:
- Maturity benefit
Those who choose a savings-focused plan or a Unit-Linked Insurance Plan (ULIP) will receive a lump sum, which is known as the maturity benefit. This amount will be paid to you at the end of the policy term.
- Death benefit
In case of an untoward event, your family will receive an amount, which is equal to the sum assured or the fund value, depending on investment made in the policy.
- Payout during the policy term
This is an alternative wherein you receive money at regular intervals throughout the policy term. It is available in a traditional savings plan or a ULIP.
Documents required while registering your bank account details
It is important to provide the necessary documents to receive the payout at the earliest. The documents include:
- Cancelled check of an Indian bank account
- Signed copy of an identity proof like Aadhaar card, PAN card, passport, or Driving License
- Electronic Payout Mandate Form
For receiving payouts in a Non-Resident External (NRE) account
As per the NRI policy settlement guidelines, if you want to receive the payout in the NRE account, you will have to provide a ‘Source of Premium’ proof. You can submit it at the insurer’s branch office or email it to them.
The payout check will be issued with the letter stating the source of funds and it will be deposited in the NRE account. There will be a deduction of tax as per the laws. Now that you are aware of the different payout options, keep them in mind when you buy life insurance online. Compare different plans and make a decision keeping your requirement at the forefront.