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Child Insurance For NRIs in India

Securing the financial future of your child is the utmost important goal as a parent and getting an insurance plan can be one of the best solutions in this case. Child insurance for NRI is a special financial product for Non-Resident Indians designed to secure a child's financial future. ...Read More

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Child Insurance For NRIs in India
Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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Best Child Insurance Plans for NRIs in India by HDFC Life

What is Child Insurance for NRIs?

image-star image-star image-star image-star image-star image-star image-cloud image-cloud image-cloud moon Child Insurance for NRIs

Child insurance is a financial product designed to make your child’s future secure if you are not present there due to any uncertain situation. The child plan for NRI has similar benefits where NRIs can purchase child insurance for their children.

This plan covers the policyholder’s death, the child’s educational and financial support, etc. Investment in a child plan also helps to get tax benefits for the premium payer.

Can Non-Resident Indians purchase child insurance in India?

Yes, Non-resident Indians (NRI) can purchase child insurance in India to secure the monetary future of a child.

Many insurance companies in India offer child insurance plans for NRIs. The child insurance policies offered by different insurance companies help to build a corpus for your child’s future requirements such as education, health, marriage, etc.

If you are a NRI, you have different options to buy a child insurance plan. You can either directly contact the insurance company, use an online platform, or by contacting an insurance agent.

However, you have to follow all the regulatory requirements and submit all the required documents to the insurance company to buy Child insurance for NRI.

Importance of Child Insurance for NRIs

NRI child insurance plan is a combination of both investment and insurance products. Its investment part allows you to build a corpus for the future of your child, which is useful for supporting the financial needs of your kid, such as education, health, marriage, etc.

The insurance part offers the death cover of the premium payer. In the case of the policy payer’s death, the company waives off all future premiums and ensures the plan continues uninterruptedly. If you are geographically distant from your family, it's important to buy a child plan for NRI for your child’s financial safety.

Additionally, you can get tax benefits by investing in this scheme. You can get a tax deduction of up to Rs. 1.5 lakh in a financial year depending on your annual premium payment*.

Types of Child Insurance Policies Available to NRIs

There are several types of child insurance policies available in India for NRIs:

Key Benefits of Child Insurance for NRIs

If you are an NRI and you want to invest in a child insurance plan then you must know these key benefits of this investment:

Financial Security

Financial Security

Child insurance plans provide financial security that ensures your child's future is secured regardless of your (parent’s) geographical distance or financial situation. These plans help you to prepare for the major events of your child’s life.

Education Planning

Education Planning

Some child insurance plans are very specific and help an NRI to plan and save for their child's education, both abroad and in India. The maturity amount can be utilised to pay the educational costs, living expenses, tuition fees, etc. of your child.

Medical Coverage

Medical Coverage

It also offers medical coverage for your child in terms of illness coverage, accidental death or disability. This provides all-in-one protection for your child’s health.

Death Benefit

Death Benefit

As a death benefit, the insurance company waives off all future premium payments if the policyholder (parent) passes away. This feature will safeguard your child’s financial security and help to ensure that their future goals are not interrupted.

Flexible Premiums

Flexible Premiums

Child insurance for NRI generally offers flexible premium payments. You can choose between regular or single-premium payment options based on your capabilities.

Tax Benefits

Tax Benefits

Under Section 80C of the Indian Income Tax Act, you can get a tax exemption of up to Rs. 1.5 lakh in a financial year. Additionally, the maturity amount is completely tax-free under Section 10(10D) subject to the conditions mentioned in the section*.

View More

How to Choose the Right Child Insurance Plan?

If you are searching for a better child plan for NRI, you should consider these points:

Coverage and Benefits

Coverage and Benefits

The first thing you should check is the benefits and coverage of the particular plan. It can include death benefits, premium waivers, rider benefits, critical illness, accidental death or disability coverage, etc.

You must ensure the maturity amount and the benefits can ensure your child's financial goals and requirements. 

...Read More

Flexibility

Flexibility

Flexibility is also an important factor when choosing a NRI child insurance plan. Based on your requirements, you should check if the plan has flexible payment options such as regular or single-premium payment options. 

...Read More

Returns on Investment

Returns on Investment

Before choosing a child insurance plan, you should determine the long-term growth potential and return on investment. For ULIP plans, you should check the track record of the insurer and the fund performance.

Traditional child plans (for example: money back policies, and child endowment plans) can be analysed based on their guaranteed returns.

...Read More

Claim Settlement Ratio

Claim Settlement Ratio

The claim settlement ratio is another important factor when choosing a better NRI child insurance plan. For NRIs, it is possible that you may not be physically present during the claim process.

Therefore, you must check the claim settlement ratio which helps to ensure a hassle-free and smooth claim process.

...Read More

Tax Implications

Tax Implications

You need to check the tax benefits before choosing a child plan because it will help you to maximise your returns. Generally, the child insurance plan has zero taxes on the maturity amount subject to conditions mentioned in Section 10(10D)* of the Income Tax Act, 1961.

...Read More

Process of Purchasing Child Insurance

If you have decided to buy a child insurance plan, you have to follow all the processes we have discussed below:
 

Steps to Apply for Child Insurance as an NRI
 

Here is a step-by-step guide to follow for applying for a child insurance plan as an NRI:

  • Step 1: First, you have to select a child insurance plan among the available plans for NRIs based on the above-mentioned factors.
  • Step 2: Read the eligibility criteria and gather necessary documents such as address proof, income tax returns (ITR), and other relevant documents.
  • Step 3: Select an insurer and contact them via customer care or helpline number.
  • Step 4: Fill up the form and submit it along with the required documents.
  • Step 5: Some insurance companies may ask you for a health checkup or medical examination.
  • Step 6: Now, you have to pay the insurance premium as per your preferred payment frequency (monthly, semi-annually or annually)
  • Step 7: After document verification and once the insurer receives the first payment, you will get policy documents.

Required Documentation
 

Make sure to keep the following documents handy while applying for a child insurance plan as an NRI:

  • Recent photograph
  • A copy of the PAN card or Declaration in lieu of PAN card
  • Passport/Aadhar Card (front & back) or Driving Licence
  • Cancelled cheque to receive maturity
  • Income proof
  • Birth certificate of the child
  • Medical records or health information of the child (if applicable)

Premium Payment Options and Currency Considerations
 

Generally, you can pay your child insurance plan premiums monthly, semi-annually or annually with different payment options such as UPI, credit card, debit card, internet banking, EMI, etc.

If you are buying insurance in India with different currencies, you have to pay some additional amount as per current exchange rates.

Common Challenges and Solutions in NRI Child Insurance

These are some of the common challenges and solutions in NRI child insurance:

Point

Challenge

Solution

Documentation and Eligibility

You may face additional documentation requirements due to your non-resident status.

Ensure you have all necessary documents for identity, address and income proof.

You can consult with the insurer to understand specific eligibility criteria.

Currency Fluctuations

Exchange rate fluctuations can impact the value of premiums and maturity amounts or payouts.

You should choose policies in Indian rupees (INR) to avoid currency risk.

Premium Payment Challenges

You may find it challenging to pay premiums from abroad.

 

You should make online premium payment methods or you may use NRE/NRO accounts.

Tax Implication

Tax laws differ for NRIs which can affect the deductions and exemptions.

You should consult a tax advisor to get tax benefits.

FAQs on Child Insurance for NRI

1 What is child insurance for NRIs?

A child insurance plan for NRIs gives similar benefits as the general child insurance plans. However, many insurance companies offer dedicated child plans for NRI parents who want to invest in child insurance.

2 Can NRIs purchase child insurance policies in India?

Yes. NRIs can purchase child insurance policies in India by providing all the required documents as per the policy criteria.

3 Are there tax benefits for NRIs on child insurance policies?

Yes. NRIs can avail of tax benefits by investing in a child insurance policy. Under section 80C*, they can get up to Rs. 1.5 lakh tax deduction based on the premiums paid.

4 How can NRIs claim the benefits of a child insurance policy?

NRIs can claim the benefits of a child insurance policy by investing in child insurance plans that are specially designed for NRI parents.

5 Are there any restrictions on NRIs investing in child insurance plans in India?

No. There are no such restrictions on NRIs investing in child insurance plans in India. Just you need to choose the correct plan for NRIs and have to provide the correct documents to your insurer.

VIEW ALL FAQ'S

Disclaimer

* Tax benefits & exemptions are subject to conditions of the Income Tax Act, 1961 and its provisions. Tax Laws are subject to change from time to time. The customer is requested to seek tax advice from his Chartered Accountant or personal tax advisor with respect to his personal tax liabilities under the Income-tax law.

ARN: MC/07/24/12976