The importance of Insurance Planning for NRIs
With globalization being the current market trend, Indians are seen residing in almost all parts of the world be it USA, UK, Australia, Canada and so forth. They are called NRIs and have a temporary or permanent stay abroad either with or without family. Financial planning especially insurance planning is very essential for such individuals. The reasons are many and here I have surmised the most important ones.
1) Dependent parents back home – it is usually seen that when Indians relocate abroad, they generally leave behind their dependent parents especially if the nature of their stay is temporary. Even if it is permanent, parents usually stay back and depend on the money sent by their NRI sons/daughters. As such, it is prudent for a NRI to invest in a policy for his parents to take care of them in emergencies when they cannot be present.
2) Building a retirement corpus – if the stay abroad is temporary, NRIs know that they have to return back after a certain time or maybe after retirement. In that case, it makes sense for them to invest in India and build a retirement corpus through a pension plan.
3) Children’s future – they also should look out towards stabilizing their children’s future by investing in good child plans if their children are supposed to go to school in India in future.
4) Currency of transaction – lastly and most importantly, the medium of payments should be planned in advance. If entire premiums are paid in foreign currency, the benefits paid are completely repatriable. But if the premiums are partly paid in foreign currency and partly in INR, the benefits paid will be repatriable to the proportion of premiums paid in foreign currency to the total premiums payable. As such, individuals need to choose the nature of payments well in advance keeping in mind the benefits receivable.
Thus, insurance planning is important for everyone whether they are Indian residents or NRIs and should be incorporated in the financial planning process.
The importance of Insurance Planning for NRIs : The importance of Insurance Planning for NRIs