Should I Continue My Life And Health Insurance When I Move Overseas

If you are moving abroad, does it make sense to continue your life and health insurance? It would mean that you would be paying a yearly premium and you would also require health insurance in the country you are staying in. Let us take a look. 

Term Insurance 

If you have financial dependents, you should continue with your term life insurance regardless of your residency status. These plans are usually not impacted by residency status, and the claim will be paid to your nominee if something were to happen to you. 

“The payout for term insurance for non-resident Indians (NRIs) works the same way as it does for Indian residents, regardless of where they are residing. The payout is regularly made to their nominee. Also, while term insurance payout in India is tax-free under Section 10(10D) of the Income Tax Act, NRIs should definitely check tax implications in their residing country,” says Tarun Mathur, Chief Business Officer (CBO), Policybazaar.

In the case of term insurance, you should retain your Indian term insurance plan as it continues to cover your life irrespective of your residential status. 

If you already have a term life policy in India, it may make sense to maintain it, especially since the premiums from India are affordable and the terms provide adequate coverage for your family. However, you should notify the insurer about your change in residency.

Health Insurance 

You should also continue your health insurance bought from India if you plan to visit your family here. You can align any major treatments and surgeries which you can plan in advance according to your visit timelines. Also, many insurers now offer global health coverage, which provides coverage worldwide. 

It makes perfect sense for NRIs to continue health insurance bought in their home country for planned treatments and surgeries in India. 

“This is because of a couple of reasons. India is a hub for medical tourism, and treatments done here are much more economical compared to the US, UK, or UAE. Also, if an NRI has family back in India, they can schedule their treatments around their visit to India,” says Mathur.

If You Do Not Plan To Return To India 

“If one is certain that they won’t be returning to India, visiting their family here, or not planning to seek any medical treatment here - they don’t necessarily need a policy here and it can be discontinued. If they’re living abroad, they can just opt for health insurance there,” says Mathur.