What NRIs Need to know Before Purchasing Health Insurance in India

Mr. Naveen is currently living in Australia but was having plans to settle in India after 2 years. He knew the importance of health insurance and that’s why he was planning to buy a health insurance policy as soon as possible. But he was very much confused about comparing health insurance in India as he didn’t know whether health insurance bought in India will give him any benefit or not. He also didn’t know whether he can pay the premium in foreign currency or will have to pay in rupees and was unaware of the procedure of buying a health insurance policy in India as being an NRI.

This is not only the case with Mr. Naveen but most the NRIs are confused about buying a health insurance policy in India. It is mostly because they are not aware of the various aspects of buying a health insurance policy in India. So let us understand the procedure, benefits, and options of buying a health insurance policy in India for NRIs.

NRIs Should Keep in Mind Before Purchasing Health Policy

Length or Approximate time to stay in a foreign country – Buying a health policy is really a good decision, and if you are Indian and living in a foreign country then you should buy two different policies and this decision is like a masterstroke. One is in India and the second is abroad, now you will ask, why two health policies. Then you need to know that, if you are living in abroad then you have to check that is there any network hospital of your insurer company and if there is no network hospital, then, in an emergency situation your abroad insurance policy will help you.

Buying a health policy and getting coverage, take approx. 3-4 years and if you are staying a short period, like 3 to 4 years in foreign then buying health policy in India is quite good for you and if you are staying longer then you should think about the policy before buying it.

Moving with or without the family – If you are heading abroad with the family, and you are going to stay abroad then you have to buy the policy abroad. But if you are going for a while then you should opt health policy in India because whenever you’ll return you’ll get everything that you deserve.

Checking the application – Before buying a health policy, knowing about the policy is basic homework and if you are buying a policy in India then you should check whether the benefits of the policy will only work in India or certain countries.

The Process of Buying and Managing Health Insurance Policy in India for NRIs

Eligibility

NRIs and PIOs are eligible to buy a health insurance policy in India. If you are an NRI, then you must have residence proof, ITR, and other required documents for buying a health insurance policy in India. For PIO, an Indian passport with other required documents is a must.

Process

You can easily buy a health insurance policy online from outside India and submit the required documents in digital format. But if you have plans to visit India soon, then it’s better to buy it when you are in India. This is because, for buying a health insurance policy, most the insurer will ask for a medical test to know your current health status according to which your premium will be decided. The cost of the medical test will be paid by the insurer if you are in India, otherwise, you will have to pay from your own pocket if the medical test is done outside India.

Payments

You can use your NRE OR FCNR account to make payment of premium through foreign-denominated policy in foreign currency. By paying through your NRE account, you will be able to repatriate your claim amount, which will allow you to convert the currency to the country of residence without any tax implication in India. You can also use your NRO account to make payment of premium in rupees.

Benefits

The cost of medical treatment is low in India as compared to developed countries.  Many people from out of India, travel to India to undergo medical treatment because of its cost-effectiveness and rate of success.  The inflow of medical treatment is higher than the outflow in India. In 2015, medical tourism was estimated to be US $ 3 billion. An MRI Scan in India costs around $90-$155 while the same MRI scan will cost you $700-2500 in the US. So having health insurance in India allows you to go through medical treatment at an affordable cost.

Due to the low cost of medical treatment, the premium amount of health insurance is very less in India in comparison to other countries. So buying health insurance in India doesn’t only allow you to have an economical medical treatment, but also allows your health insurance policy to easily fit into your budget.

Key Points 

• Check the geographical coverage:- One of the most important things to check in a health insurance policy is the clause of geographical coverage. Your policy might cover treatments in India only and thus any treatment taken outside India will not be covered under your policy in most of the health insurance plans. But there are some health insurance policies, which provide cover for specific treatments taken outside India as well.

• Go through FEMA regulations:- It is very much necessary to go through the FEMA regulations before buying a health insurance plan in India regulation #3 of FEMA talks about repatriation. It allows the amount to be repatriated only to the extent of the premium paid in the foreign currency.

• Income Tax regulation:- There is a tax benefit on health insurance premiums in India. Premiums up to Rs.25,000 are exempted from Income Tax under section 80D. NRIs can avail of the same benefit under section 80D of the Income-tax Act 1961. But he will have to pay tax in the country of his residence on his income. So it is necessary to go through the tax regulation of the said country.

Buying a health insurance plan in India is a good idea only if you have plans to settle in India after a couple of years otherwise, the premium will become a financial burden for you and you will not be able to receive any benefits from it. Go through the terms and conditions of the health insurance policy which you are going to buy and get every iota of your queries solved so that you can enjoy the benefits of your policy in the best possible way without any hassles.