Mr. Naveen is currently living in Australia, but was having plans to settle in India after 2 years. He knew the importance of health insurance and that’s why he was planning to buy a health insurance policy as soon as possible. But he was very much confused about compare health insurance in India as he didn’t know whether a health insurance bought in India will give him any benefit or not. He also didn’t know whether he can pay the premium in foreign currency or will have to pay in rupees and was unaware about the procedure of buying a health insurance policy in India as being an NRI.
This is not only the case of Mr. Naveen, but most of the NRIs are confused about buying a health insurance policy in India. It is mostly because, they are not aware about the various aspects of buying a health insurance policy in India. So let us understand the procedure, benefits and options of buying a health insurance policy in India for an NRI.
The Process of Buying and Managing Health Insurance Policy in India for NRI
NRI and PIO are eligible to buy a health insurance policy in India. If you are an NRI, then you must have a residence proof, ITR and other required documents for buying a health insurance policy in India. For PIO, an Indian passport with other required documents is must.
You can easily buy a health insurance policy online from outside India and submit the required documents in digital format. But if you have plans to visit India soon, then it’s better to buy it when you are in India. This is because, for buying a health insurance policy, most of the insurer will ask for a medical test to know your current health status according to which your premium will be decided. The cost of medical test will be paid by the insurer if you are in India, otherwise you will have to pay from your own pocket if the medical test is done outside India.
You can use your NRE OR FCNR account to make payment of premium through foreign denominated policy in foreign currency. By paying through your NRE account, you will be able to repatriate your claim amount, which will allow you to convert the currency to the country of residence without any tax implication in India. You can also use your NRO account to make payment of premium in rupees.
The cost of medical treatment is low in India as compared to developed countries. Many people from out of India, travel to India to undergo a medical treatment because of its cost effectiveness and rate of success. The inflow of medical treatment is higher than the outflow in India. In 2015, the medical tourism was estimated to be US $ 3 billion. An MRI Scan in India costs around $90-$155 while the same MRI scan will cost you $700-2500 in the US. So having a health insurance in India allows you to go through a medical treatment at an affordable cost.
Due to the low cost of medical treatment, the premium amount of health insurance is very less in India in comparison to other countries. So buying a health insurance in India doesn’t only allow you to have an economical medical treatment, but also allows your health insurance policy to easily fit into your budget.
Key points to remember
- Check the geographical coverage:- One of the most important things to check in a health insurance policy is the clause of geographical coverage. Your policy might cover treatments in India only and thus any treatment taken outside India will not be covered under your policy in most of the health insurance plans. But there are some health insurance policies, which provides cover for specific treatments taken outside India as well.
- Go through FEMA regulation:- It is very much necessary to go through the FEMA regulations before buying a health insurance plan in India like regulation #3 of FEMA talks about repatriation. It allows the amount to be repatriated only to the extent of the premium paid in the foreign currency.
- Income Tax regulation:- There is a tax benefit on health insurance premium in India. Premiums up to Rs.25,000 are exempted from Income Tax under section 80D. An NRI can avail the same benefit under section 80D of Income tax Act 1961. But he will have to pay tax in the country of his residence on his income. So it is necessary to go through the tax regulation of the said country.
Buying a health insurance plan in India is a good idea only if you have plans to settle in India after a couple of years otherwise, the premium will become a financial burden for you and you will not be able to receive any benefits from it. Go through the terms and condition of the health insurance policy which you are going to buy and get every iota of your queries solved, so that you can enjoy the benefits of your policy in the best possible way without any hassles.