Term Insurance in Saudi Arabia

Term insurance plans in Saudi Arabia are offered by many leading insurers in India can be customised to meet the protection needs of various individuals including non-resident Indians (NRIs), persons of Indian origin (PIOs), or overseas citizens of India (OCIs) and their families. These policies will secure the policyholder's family's financial future in the case of an unfortunate occurrence happening to insured. NRIs can purchase these term plans from Indian insurance providers like Axis Max Life Insurance, to get substantial financial cover at affordable premiums.

As per data provided by the Ministry of External Affairs in India, an estimated 24.6 million NRIs were living in Saudi Arabia as of 2022. While some of these individuals have dependents living with them in Saudi Arabia, a large proportion have families and loved ones residing back home in India. A term plan offers an affordable way for such NRIs to secure the financial future of their loved ones if the unexpected happens.

Term insurance plans in Saudi Arabia for NRIs works the same way as a term insurance plan purchased in India by a resident Indian. These policies offer the benefit of life cover to the insured during the policy term in lieu of timely premium payments made by the policyholder. Moreover, NRI term plans can be conveniently obtained either online or offline. In recent times, instead of compulsory in-person physical tests, many applicants are also offered the convenience of video medicals that has further streamlined the process of purchasing these policies.

In many cases, NRIs working in Saudi Arabia are the sole breadwinner for the family and this makes them responsible for their family’s financial security. Purchasing a term insurance plan in Saudi Arabia can help augment the financial protection of their loved ones beyond just the savings that the family may have access to. The following are some of the top reasons why NRIs should buy a term plan in Saudi Arabia:

1- Variety of Choices: In view of the large Indian diaspora in Saudi Arabia, many leading insurers in India have started offering term insurance in Saudi Arabia. These plans come with various policyholder-friendly features and customisation options such as multiple rider/add-ons to enhance protection, flexible premium payments options, customizable life cover amount, various plan tenure options and more.

2- Tele/video medical checkups video: To buy a term insurance plan for NRI in Saudi Arabia from India, the policyholder does not need to be in India or even appear for a medical test in person in all cases. Many insurers are currently offering the option of video medical tests that be can be done online. However, in some cases, a physical medical test may be conducted based on the insurer’s internal policies and/or results of the video medical test.

3- Easy claims process: If a NRI buys term insurance in Saudi Arabia, the claim process can be started even if the Nominee is not located in India. This flexibility makes the entire process of making a claim on a NRI term plan seamless.

4- Financial Security of dependents: The primary reason for NRIs to purchase a term insurance is to provide their loved ones with financial security, in the case of untimely death. In the case of policyholder’s death, the term insurance payout can help their family manage daily expenses, pay off outstanding liabilities and help with various future financial needs.

5- Tax benefit: Term insurance for NRI also comes with tax benefits under section 80C of the Income Tax Act, 1961.  Under this, NRIs can get tax deductions of up to Rs. 1.5 lakh per annum on any income they earn in India. If they add add-ons/riders such as critical illness and disability rider, then the premium paid for the same will also be eligible for a deduction of up to Rs. 25,000 (maximum Rs. 50,000 for senior citizens) under section 80D. However, these tax deduction benefits can only be availed if the policyholder has opted for the old tax regime.

6- Concession of GST: If NRIs purchase Term Insurance from India, they can qualify for a unique 18% GST exemption. It is advisable to make the premium payment through Non-Resident External (NRE) account in Indian currency to get this benefit.

7- Affordable Premiums: In comparison to life insurance policies acquired overseas, those obtained by NRIs from insurers based in India tend to be more cost-effective. This way, a substantially high cover amount can be obtained by the policyholder at a reasonable cost.

For non-resident Indians, term plans in Saudi Arabia work exactly in the same way as a term plan purchased in India. So, as long as the premiums are paid in a timely manner, the benefits of the term plan will be available as per the terms and conditions specified by the policy. This means that in the event of the insured’s death during the policy term, the life cover amount will be paid out to the nominee.

Additionally, if the policyholder opts for the optional return of premium rider, he/she has the option to get a refund for all premiums that have been previously paid subject to applicable terms and conditions specified in the policy. Apart from this NRIs purchasing a term insurance policy in Saudi Arabia will also have the option to pick and choose various optional riders/add-ons that can enhance the protection of the term plan by insuring other adverse events such as diagnosis of a critical/terminal illness, accidental death or dismemberment, etc.

Saudi Arabian-based NRIs need to meet specific eligibility criteria to buy term insurance in Saudi Arabia that are offered by insurers based in India. These criteria include:

• Age: the policyholder should be between 18 years to 65 years old.
• Medical examination: A medical test may be required depending on the applicant's age and sum assured.
• Residential status: NRIs have to submit proof of their residential status, which can be established documents like a valid Indian passport, Visa, and overseas address proof.

Note: The above eligibility criteria are generic and for illustrative purpose only. Additional criteria may be communicated by the insurer on a case by case basis based on internal guidelines.

The following are some key documents that NRIs need to provide when purchasing a term insurance plan in Saudi Arabia:

• Application or proposal form
• Valid passport
• Medical examination reports
• Proof of age like birth certificate
• Valid visa copy
• Last entry-exit stamp for travel to India
• Income proof
• Address proof in Saudi Arabia

Note: The above list of documents for purchase of a term plan in Saudi Arabia is for illustrative purposes only. Insurers may ask for additional documentation on a case by case basis as per their internal guidelines for NRI term insurance plans.

NRI can purchase a term insurance plan for the protection of their family in two ways:

1- While visiting India: It is relatively easy for a NRI to buy a term insurance plan while they are visiting India. Once you have to locate a preferred insurer, follow the term plan purchase procedure of the insurer, submit required documentation and pay the first premium. However, as an NRI living in Saudi Arabia, you are required to provide a valid overseas address in Saudi Arabia as well as a proof of employment/business in Saudi Arabia, etc. What’s more, based on your profile you may be eligible for video medical test instead of an in-person medical test that can enhance the convenience of these policies.

2- Overseas in Saudi Arabia: Many Indian insurers have operational representative offices in Saudi Arabia. These overseas local offices have been set up for the convenience of NRIs who are working in the country. Among the various services available through such offices, one key function is the issuance of new NRI policies. Additionally, these overseas representative offices also serve a one-stop shop for availing a range of policy services ranging from premium payments and updating address/nominees to processing claims.

Step 1: Visit the official website of the insurer and fill out the online form with basic details such as Name, Phone Number, Income and your NRI status (Yes/No) and country of residence.

Step 2: On the next page provide a few additional details such as Gender, Tobacco/Nicotine usage, Occupation, etc. Once these details have been provided you can see the various term plans in Saudi Arabia that you may be eligible for.

Step 3: Next you will need to fill out the application form with all the required information such medical history, policy tenure/cover amount, etc.

Step 4: After that, submit the required documents like proof of identity, income, overseas address proof, proof of NRI status, etc. Next you will need to pay the first premium to proceed further.

Step 5: Once the required documents have been submitted, you will need to take a medical test either in person at a diagnostic centre specified by the insurer or via a video call, if applicable.

Step 6: After the medical test results have been collated and documents have been verified, the term insurance policy will be issued.

Note: These steps for purchasing a term plan in Saudi Arabia are generic and for illustrative purpose only. The actual steps involved may vary to some extent based on the applicant profile as well as the internal policies of the life insurance company.