The Life Insurance Corporation of India (LIC) offers various flexible provisions to ensure that its policyholders can benefit the most from a life cover. The company has various special provisions when it comes to offering coverage for non-resident Indians (NRIs) or people of Indian origin living in other countries. If you are an LIC policyholder who is thinking of moving abroad, you must review your existing life covers to check if there are any alterations to be made. Before discussing the ways to deal with your policy, let’s take a look at the general guidelines regarding coverage for NRIs.
Some of the general guidelines regarding life insurance coverage for NRIs are listed as follows:
If you are an existing policyholder moving abroad, it is better to intimate the company regarding the relocation. Though it is not mandatory to inform the company, policyholders can get certain benefits by keeping the company in the loop. If the company is already notified, it will be easier to do the paperwork during the time of a claim. The company can be notified by visiting the home branch where you have purchased the policy.
An NRI questionnaire will be given by the company while notifying about the relocation. It asks for various details like purpose of visit, duration of stay, passport number, source of future premium payments, etc. Once these questions are answered, the company will process the application and make necessary alterations to the policy. If you have multiple policies with LIC in different branches, it is important to notify the respective branches of this relocation.
Any proceeds from an LIC policy (death or maturity) are exempt from taxes in India. However, this may not be the case in policies for NRIs. If the proceeds are withdrawn in foreign currency, it may attract tax in a foreign country. NRIs must check the regulations in their country of residence while withdrawing the proceeds from their insurance policies.
Before moving abroad, those who have LIC policies must consider the following things:
LIC policies are among the most favoured investment tools for Indians. Since LIC policies provide coverage anywhere in the world, there is no reason to surrender your policy unless you plan on giving up Indian citizenship altogether. LIC also operates an NRI center to assist policyholders living in another country. If you have any further doubts on how to deal with your LIC policies while moving abroad, you may consult a financial advisor to evaluate the overall impact of your relocation.
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