Thanks to lower premium, more NRIs are buying life insurance form India

Low premium rates have spurred the demand for life inurance from Non-Residential Indians (NRIs), Times Of India reported Saturday. Despite a hike by some insurers of late, the premium rates continue to remain competitive.

NRIs, having their dependent families or outstanding home loans in India, continue to buy term cover from Indian insurers. NRIs find Indian term insurance rates 20-50% cheaper, depending on where they reside.

NRI premium jumps in April-June

Reportedly, the NRI premium income of Bajaj Allianz has jumped by 59% during the first quarter of the current fiscal year. The number has increased to Rs 182 crore in Q1FY22 from from Rs 115 crore in Q1FY21 . According to the company, the increase in numbers is primarily due to higher overseas rates.  On an average the premium rates overseas are about 20% higher than what customers pay in India.

Exide life Insurance saw a two-fold jump in its premium collection to Rs 20 crore during April-August 2021 year-on-year. Buyers also get a reassurance due to the high settlement ratio of 98.54%, the company said. The demand is mainly driven by those working in the UAE, followed by other Asian countries and Europe.

Policybazaar.com reported that the premium paid for buying a term cover in India is cheaper by 20% to 40% as compared to any other country.

Pre-acceptance medical tests a downside

The cost of pre-acceptance medical tests, however, have to be borne by NRIs which is a major downside. In USA and European nations, these tests are particularly expensive and insurers are not willing to reimburse them. Post-pandemic, premiums have gone up by 25% on term covers.