Bought a term insurance plan in India but moved abroad? Here’s what happens to your cover

Term plans bought in India remain valid even after one becomes an NRI. But policyholders must fulfil certain formalities to ensure their cover continues seamlessly. Here’s what you need to know to ensure your policy stays active and provides seamless coverage.

Declaration of NRI status

“The key point is, when you move abroad, you must write to your insurer and declare your change of status. Policies remain valid, but companies generally ask you to update your KYC or submit a change-of-residency form,” said Nishant Kohli, founder of NRI Nivesh.

Insurers typically ask for supporting documents such as a visa, work permit, passport, and proof of overseas address. Without this declaration, claims can become complicated later.

Mainak Adhikary, head of operations at Go Digit Life Insurance, agreed. “Most Indian insurers extend life insurance coverage to NRIs and term plans purchased in India stay valid even after residency status changes. However, you must notify your insurer in case of any change in residency status. This ensures your records are updated and helps in smooth claim processing,” he said.

High-risk countries

While moving to countries such as Singapore, the UK or the US doesn’t create issues, insurers may not provide the same comfort for all geographies.

“Some countries are blacklisted by insurers, for example, parts of Africa such as Nigeria or Ghana, because of higher risks related to crime, political instability or healthcare. If you relocate to such geographies, insurers may increase your premium or restrict coverage,” explained Kohli.

Insurers maintain a list of restricted countries, especially those experiencing war, civil unrest or sanctions, said Adhikary. “If the policyholder moves to such countries, it may impact claim admissibility or require additional documentation,” he said.

An insurance proposal is assessed basis the disclosures in the proposal form, at inception stage, said Prithesh Chaubey, appointed actuary, SBI Life Insurance Co. Ltd. “A change in residency at a later stage, would not have any impact on the decision. Therefore, the terms of the policy will remain unchanged.”

A list of high-risk/blacklisted countries is maintained by banks, but the cognisance is taken at the time of risk assessment only, Chaubey added.

Premium payments and GST waiver

Once abroad, premiums can be paid from either an NRO (non-resident ordinary) or an NRE (non-resident external) account. “If you pay from an NRE account, GST is waived, which is a big saving. For example, if your premium is ₹1 lakh annually, you save the 18% GST by paying through NRE,” said Kohli.

Adhikary pointed out that the waiver typically applies upfront. “Most NRE accounts do not require GST to be paid on premiums. Insurers directly waive off GST, and you only pay the premium amount,” he said.

KYC update: online vs offline

Updating KYC after a change in residency is crucial. “Now, the PAN card or Aadhaar doesn’t change. What changes is your residency status. You must declare that formally,” said Kohli, adding that insurers often insist this be done in person when you visit India, as online service levels remain patchy.

Adhikary noted that some insurers have moved to digital servicing. “NRIs need to submit a valid passport, visa or work permit, PAN card and overseas address proof. Many insurers now allow KYC updates online through their portals or apps, making the process more convenient,” he said.

Worldwide coverage, but with conditions

If a claim arises abroad, term insurance generally provides global protection. “If you’ve declared everything honestly—your move abroad, your medical history, etc.—then claims should not be an issue, even if death occurs outside India,” said Kohli.

Adhikary added a caveat: “Claims may not be admissible in case of death in a restricted or high-risk country. But if the person passes away in a covered location and the policy terms are met, the nominee will receive the claim.”

Final thoughts

Inform your insurer as soon as you move abroad, update your KYC with proof of overseas residency, pay premiums through an NRE account to save on GST, be mindful of insurers’ restricted country lists and ensure nominee details and medical history are declared accurately.

Your Indian term plan remains valid even after you become an NRI, but it won’t run on autopilot. Keeping your insurer informed and complying with documentation requirements ensures your family’s financial protection continues seamlessly—no matter where you live.