Can NRIs in the US buy term insurance in India? Yes, and here is exactly how

If you are an NRI living in the US, you have probably wondered whether buying term insurance back home in India is even possible. Maybe someone on Quora told you it is, someone else said you need to fly down, and a third person confused the rules for green card holders with those for passport holders. Here is the straight answer, the full process, and the tax math, all in one place.

The short answer: NRIs in the US can buy Indian term insurance online

NRIs holding a valid Indian passport are fully eligible to purchase term insurance from Indian insurers. Insurance eligibility is governed by IRDAI regulations and insurer underwriting guidelines; FEMA 1999 separately regulates the foreign-exchange aspects, such as premium payment via NRE/NRO accounts and repatriation of claim proceeds abroad. The entire process, from application and document submission to medical examination, can be completed online from the US without a single trip to India. HDFC Life’s NRI application portal, for instance, outlines a remote application process for qualifying applicants.

Indicative quotes from HDFC Life’s and Axis Max Life’s online premium calculators (accessed 2025) suggest a ₹1 crore term plan for a healthy 30-year-old non-smoker resident Indian could cost approximately ₹8,000–12,000 per year. NRI applicants may face premiums 10–30% higher due to additional underwriting loading; prospective buyers should obtain a personalised NRI quote directly from the insurer’s calculator. Indian term premiums tend to be lower than US-market equivalents for the same cover amount, though the exact difference depends on the insurer, your age, and health profile. A verified, source-attributed percentage comparison against US market premiums is not publicly available from any credible source.

If you are still weighing whether term insurance is the right type of life cover, the pricing alone should interest cost-conscious NRIs.

Eligibility rules: who qualifies and who does not

You qualify if you hold a valid Indian passport

The primary requirement is straightforward: a valid Indian passport with no pending or intended application for foreign citizenship. Most Indian insurers accept NRIs across all US states, though application forms will require your US address, visa type, and duration of stay abroad.

Green card holders are not eligible

This is the most common misconception. Green card holders are ineligible for NRI term insurance at LIC, which explicitly requires current Indian citizenship and a valid Indian passport. Axis Max Life applies broader criteria that can also include PIOs and OCI card holders. Green card holders are generally ineligible across major Indian insurers, but the specific grounds differ by insurer. Indian insurer underwriting policies generally classify green card holders as ineligible for NRI term products. However, eligibility is not universally restricted to active Indian passport holders: several major insurers also extend cover to OCI card holders who no longer hold an Indian passport. LIC is the primary insurer that explicitly ties eligibility to current Indian citizenship and a valid Indian passport.

OCI and PIO cardholders: a grey area

OCI (Overseas Citizen of India) and PIO (Person of Indian Origin) cardholders may qualify under separate provisions with certain insurers. Eligibility varies by company, so check directly with the insurer’s NRI desk before applying.

FATCA declaration is mandatory

Every NRI purchasing life insurance in India must submit a FATCA/CRS (Foreign Account Tax Compliance Act / Common Reporting Standard) self-certification declaration. This is required under Indian regulations — an IRDAI circular and CBDT Income Tax Rules 114F–114H — which implement India’s obligations under the India–US FATCA Inter-Governmental Agreement (2015) and the OECD Common Reporting Standard. Indian insurers include the declaration form in their standard application process. Skipping this step will stall your application.

Step-by-step: how to buy Indian term insurance from the US

Step 1: Choose your insurer and plan. Compare term plans from multiple insurers using online comparison platforms. Look at the sum assured range (typically ₹25 lakh to ₹10 crore for NRI plans, with exact limits varying by insurer), policy tenure options, and rider availability. Do not pick based on brand recognition alone; check claim settlement ratios (more on this below).

Step 2: Fill out the online application. You will need to declare your NRI status, US address, visa category, annual income, and occupation. The FATCA/CRS declaration is part of this form.

Step 3: Submit documents digitally. Upload scanned copies of your passport, US visa, proof of US address, income proof (US tax returns or pay stubs), and passport-size photographs. Some insurers accept e-signatures; others require wet-ink signatures on printed forms mailed or couriered back.

Step 4: Complete the medical examination. You do not need to fly to India for this. For NRI applicants requiring a physical medical examination, some insurers have empanelled diagnostic centres in select global hubs (typically the UAE, UK, and Singapore). However, many insurers now offer Video Medical Examination Reports (VMER) as an alternative, which removes the need for an in-person overseas appointment for applicants below specified age and sum assured thresholds. Several major insurers (including HDFC Life, Tata AIA, and ICICI Prudential) now offer video medical examination reports (VMER) for NRI applicants. For more on when medical tests are required and when you can skip them, see our detailed guide.

Step 5: Pay the premium. This is where your account choice matters (explained in the next section). Pay via your NRE or NRO account.

Step 6: Receive your policy document. Industry sources suggest NRI application processing typically takes 2 to 8 weeks due to additional underwriting and document verification requirements due to additional underwriting requirements for overseas applicants (2025). Your e-policy will be emailed; a physical copy can be couriered to your US address.

NRE vs NRO account: this decision affects claim repatriation

This is one detail many NRIs overlook, and it has real consequences when a claim is filed.

NRE account (Non-Resident External): Premiums paid from an NRE account make the claim or maturity proceeds fully repatriable. Your nominee can receive the death benefit directly in a US bank account in the currency of their choice.

NRO account (Non-Resident Ordinary): HDFC Life, Tata AIA, and ACKO each state in their NRI policy terms that proceeds from NRO-funded policies are payable in Indian Rupees only and are non-repatriable (as of 2025).

If your family lives in the US and would need the death benefit in dollars, pay from your NRE account. If your dependents are in India and will use the funds domestically, an NRO account works fine.

Tax implications for NRIs: Sections 80C, 10(10D), and 194DA

Section 80C: premium deduction (conditional)

NRIs can claim a deduction of up to ₹1.5 lakh per financial year on term insurance premiums under Section 80C. But this applies only if you have taxable income in India and file under the old tax regime (Tata AIA NRI Tax Benefits Blog; HDFC Life, 2025). If you earn solely in the US with no Indian income, this benefit does not apply to you.

Section 10(10D): death benefit is tax-free

The death benefit from an Indian term policy is fully exempt from Indian income tax under Section 10(10D), with no upper limit. The only condition: for policies issued after April 1, 2012, annual premiums must not exceed 10% of the sum assured. Since term insurance premiums are a tiny fraction of the sum assured, this condition is almost always met.

Section 194DA: TDS on payouts

Section 194DA applies to maturity or surrender proceeds that exceed ₹1 lakh and are taxable (i.e., when premiums exceeded the 10% threshold above). Pure term plans typically have no maturity benefit, so 194DA rarely applies. If you are considering a return-of-premium plan, check whether TDS will be deducted on the returned premium component.

US tax obligations

As a US tax resident, you must report the Indian policy to the IRS. Death benefits from a pure term plan are generally not taxable in the US. If India taxes any proceeds (for instance, if TDS is deducted on a return-of-premium component under Section 194DA) the India-US Double Taxation Avoidance Agreement (DTAA, 1989) may allow you to claim a credit for that Indian tax against your US tax liability on the same income. Whether and how much relief you receive depends on how the IRS classifies the proceeds; consult a cross-border tax advisor for your specific situation.

Claim settlement ratios of Indian insurers (FY 2024-25)

The biggest worry for NRIs buying Indian term insurance: “Will the company actually pay?” The data says yes. Here are individual death claim settlement ratios for FY 2024-25, sourced from the IRDAI annual report and insurer disclosures:

• Axis Max Life: 99.70% (Axis Max Life audited annual financials FY 2024-25; Axis Max Life official website)
• HDFC Life: 99.68%, up from 99.50% in FY 2023-24 (HDFC Life official website)
• LIC: 98.24% death claim CSR; settled over 2.29 crore claims totalling ₹2.69 lakh crore (LIC Annual Report FY 2024-25)
• Tata AIA: 99.41% (Tata AIA official website)
• ICICI Prudential: 99.34% (ICICI Prudential official website)

The overall industry CSR for individual death claims in FY 2023-24 was 96.82% by number of claims and 96.13% by benefit amount, with ₹28,867.59 crore paid out across LIC and private insurers combined (IRDAI Annual Report 2023-24). For a deeper comparison between private and public sector insurers, read our analysis of who actually settles claims better.

IRDAI mandates that claims must be settled within 15 days of document submission, or 45 days if an investigation is required. For deaths abroad, the nominee submits an Indian Embassy or Consulate-attested death certificate along with standard claim documents. No travel to India is required by the nominee.

The GST advantage: 0% GST on term insurance since September 2025

Here is a recent change that makes Indian term insurance even more attractive for NRIs. The GST Council reduced the tax on individual term insurance premiums from 18% to 0%, effective September 22, 2025 (GST Council notification; Pramerica Life, 2025). On a ₹15,000 annual premium, that is ₹2,700 saved every year.

What to watch out for

Currency risk: Your sum assured is in Indian Rupees. If the rupee depreciates against the dollar over your policy tenure, the real value of the death benefit in dollar terms decreases. Factor this in when deciding your cover amount.

Disclosure obligations: Non-disclosure of your NRI status, pre-existing medical conditions, or hazardous occupations can lead to claim rejection. Indian insurers have the right to investigate claims within three years of policy issuance, after which Section 45 of the Insurance Act, 1938 (as amended in 2015) bars insurers from contesting the policy on grounds of misrepresentation.

Policy servicing: Ensure your chosen insurer has a functional NRI desk or online portal for premium payments, address changes, and nominee updates. Servicing a policy from 10,000 miles away requires a responsive digital infrastructure.

Indian term insurance is one of the most cost-effective ways for NRIs in the US to secure their family’s financial future back home. The process is fully digital, claim settlement ratios are above 99% for leading insurers, and the 0% GST regime makes premiums lighter than ever. Start by comparing plans from at least three insurers, pay from your NRE account if you want repatriable proceeds, and keep your FATCA declaration ready.

Frequently asked questions

Can NRIs with a green card buy Indian term insurance?

No. Indian insurer underwriting guidelines require active Indian citizenship, and their NRI product terms restrict cover to Indian passport holders. Green card holders are classified as ineligible. OCI or PIO cardholders may qualify under separate provisions with certain insurers; check directly with the insurer’s NRI desk.

Do NRIs need to travel to India to buy term insurance?

No. The application, document submission, and medical examination can all be completed from the US. Insurers have empanelled doctors in major US cities, and some accept tele-medical video check-ups for eligible applicants.

Should an NRI pay term insurance premiums from an NRE or NRO account?

Pay from your NRE account if your nominee is in the US and will need repatriable funds in foreign currency. Pay from an NRO account only if your nominees are in India and will use the death benefit domestically, as NRO proceeds cannot be repatriated and are paid in Indian Rupees.

Is the death benefit from an Indian term policy taxable in the US?

Death benefits from a pure term plan are generally not taxable in the US. You must still report the policy to the IRS. If India has already taxed any part of the proceeds, the India-US DTAA (1989) may allow you to offset that Indian tax against your US liability on the same income. Consult a cross-border tax advisor for your specific situation.

What documents does an NRI in the US need to apply for Indian term insurance?

You will need a valid Indian passport, US visa documents, proof of US address, income proof (US tax returns or pay stubs), passport-size photographs, and a completed FATCA/CRS declaration. Some insurers accept e-signatures; others require wet-ink signatures on printed forms mailed or couriered back.