Retirement insurance for NRIs

Retirement insurance for NRIs

July 31, 2019 9:25 am,

In this article we will understand what are the different retirement and pension insurance plans are available for NRIs in India. So, the insurance providers have a multitude of options for NRIs.

What are the types of retirement insurance for NRIs?

The insurance providers have pension plans that are:

  • Annuity plans – that provide regular income in the retirement years
  • Pension corpus plans – that help to secure retirement fund
  • Guaranteed pension plans – that give guaranteed returns
  • Unit linked plan – that offer market-linked returns

HDFC Life insurance provides the option to transfer the accumulated pension pot in the UK under the QROPS plan.

QROPs will help to transfer pension pot to India and helps in providing steady income post-retirement. So, the plan also provides a growth opportunity in India.

How can individuals subscribe to retirement plans?

NRI individuals can subscribe to the retirement plans using the online portal for the offering insurer. Hence, almost all the insurers have a dedicated NRI customer centre. So, the insurance companies, HDFC Life insurance, ICICI Prulife insurance, Max Life insurance, LIC, Kotak Life insurance have dedicated NRI centres.

Consideration for buying retirement or pension scheme?

Planning retirement is important with the need to maintain a preferable lifestyle post-retirement. Thus, the following factors are to be considered before buying the retirement or pension scheme.

  • The committed returns offered by the pension plan, both currently and in the future of the plan after 5 to 10 years.
  • Variations in the plan about annuity, percentage conversion of lumpsum payout versus annuity
  • Repatriation clauses in the pension plan if the need is to repatriate the payout to the outside of India
  • Decide upon whether to go for single payment policy or multi-year policy
  • Vesting age – the age from when the pension will start. It provides  flexibility for the individual to choose to retire early or late depending on the type of career and financial status
  • Rider options – A few of the insurers provide options for rider benefits. Hence, this includes comprehensive coverage for family and customized to individual needs
  • Benefits transferred to nominees and option to choose a single or joint annuity

Premium payment and operation of the policy?

Payment of premium is possible through NRE or NRO account of the policyholder. Besides, the insurance companies also offer other means of payment such as through SWIFT payments, ECS payments and Direct Debit payments etc.

Hence, the policy document is sent through email and can be sent to the postal address if requested.

Tax Benefits

Hence, a few of the plans provide options to save tax under Section 80CCC and applicable sections under Income tax act 1961.

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