Can NRIs get health insurance in India?

Friday 2 March 2018 1:57 AM UTC

By Jeevan Vipinchandran

Without good health, long life and wealth are meaningless. Therefore the issue of whether NRIs are eligible for health insurance in India is an important one.

Every Indian, every person will want the comfort of knowing that they will be looked after when they are ill. It is well known that India unlike the UK has no NHS style healthcare system which is free at the point of service.

Instead it has a private lead healthcare system which has a better reputation and quality, and a government lead system for poorer people who cannot afford medical costs or insurance.

Most NRIs would opt for private led healthcare, so they may require health insurance in case of a major illness. The most important thing to know about Indian health insurance is that there are typically clauses restricting the geographical coverage of the insurance.

Basically the typical Indian insurance package is valid only in India and cannot cover the cost of medical procedures held abroad. So NRIs cannot use Indian insurance schemes to undergo expensive cutting edge procedures in places like Britain or the US.

Some insurers may be willing to cover treatment for serious illness abroad, but such cases are likely to be rare.

There are underwriting restrictions for people outside of India. Many Indian insurance companies will consider people of Indian origin living abroad to be of higher risk.

This means that it may be more difficult for them to obtain insurance. It is likely that in any case that the NRI community members who seek Indian medical insurance will be expected to pay higher premiums.

FEMA (Foreign Exchange Management Act) Law is another area which NRIs will need to be mindful of. An NRI may continue to hold or purchase insurance from outside India even after returning to India permanently, should they choose to do so.

Furthermore the pay out from insurance claims can be repatriated from India to accounts outside India, which is potentially a great advantage if you are aiming only to visit India rather than to return there permanently.

There is a significant tax deduction on health insurance premiums for Indians and NRIs alike. The tax deduction under Section 80 of the Income Tax Act ensures that an NRI is allowed to deduct a maximum of 25,000 rupees from tax on insurance premium pay-outs.

This simply means that you do not have to the first 25,000 rupees tax on a health insurance claim in India. Interestingly if you are paying for insurance on behalf of parents in India the deduction for the same amount of 25,000 rupees is also applicable.

The decision on whether or not to obtain health insurance in India depends on a number of factors, including age, medical conditions, how well you travel and most importantly how long you plan to stay in India.

It may be that you feel you can afford the cost of one-off medical treatment in India as an NRI, but it is still a useful subject to know about should you decide to move back to India permanently.

Jeevan Vipinachandran is a political analyst and writer, specialising in political violence and counter-terrorism. He graduated from LSE with a Masters in Comparative Politics: Conflict Studies.

He has written for the Conservative Party, Future Foreign Policy and the Times of Israel. Regular updates can be found on Twitter on @jeevanvc  and www.jeevanvc.com. Jeevan also blogs on business development and holistic lifestyle growth at www.my-wise-owl.com.

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