Whenever an Indian resident moves abroad to start his life as an NRI, a lot of questions on health insurance pop up in the mind? Should I continue my existing health insurance? Will my existing health insurance cover my medical expenses abroad? How can I provide health cover for my parents/family who still reside in India? Health insurance for NRIs is a complex subject, and this article will address all of the major issues will NRIs may face.

An NRI who has settled abroad and intends to return, might have different questions on health insurance. Should I buy health insurance in India now or when I return?

Let us first understand what type of NRI health insurance schemes are available in India. Health insurance policies are available as individual policies as well as family floater policies. Individual policies provide health cover for an individual until the end of life, provided premiums are paid every year. Family floater policies provide a cover for the entire family, with no preset cover specified for each family member. The coverage specified in a family floater policy, is the total hospitalization and medical expenses allowed for the entire family.

Below are some pointers for an NRI to consider, before buying health insurance in India:

  • Planned time to return to India
  • Current age
  • Any pre-existing diseases

Let us further analyze each of the pointers from an NRI perspective.

Planned time to return to India

  1. If you wish to continue your existing health insurance policy, evaluate how long your stay abroad will be. If it is less than 4 years, continue the policy. If you are going abroad for the long term and not definite about the return, you can cancel the policy.
  2. If you have an existing health policy which covers your family and aged parents in India, it makes sense to continue the policy, irrespective of your tenure abroad.
  3. If you wish to buy a new NRI health insurance policy, evaluate your length of stay abroad. If you are there for a long term, it is advisable to buy a health cover in the country you intend to stay.
  4. If you are staying abroad for short term, you can always buy a health policy in India so that you can benefit from lower premium rates.
  5. If your family intends to stay back in India during your term abroad, it is best to buy a comprehensive health cover for them before you leave.

 Current Age

  1. If you are above 40 years of age and planning to move abroad for a long term, it still makes sense to continue the policy. The health insurance premiums in India are very expensive for a person who has crossed 40 years, and also the cost increases with the addition of every 5 years to your age.
  2. If you are relatively young and hope to return to India, you can consider stopping your health insurance policy.

 Pre-existing diseases

  1. If you have a pre-existing disease, the insurance companies specify a certain waiting period, under which any hospitalization or medical costs related it are not covered. If you have an existing disease, it makes sense not to cancel your existing health cover in India, if you wish to return.
  2. If you intend to return to India in 3-4 years’ time, you can buy a new health cover even if you have a preexisting disease. On return to India after 3-4 years, any hospitalization due to it will be covered.

India is a haven for medical tourists. The best possible treatments, care and facilities are available in India at relatively low costs, compared to the rest of the world. People from developed countries, including the US and the UK travel to India for cost-effective medical care. Therefore, if you have a health insurance in India, you can always travel back for the treatment in India at lesser costs.

When you decide to go ahead and buy a new health insurance in India, before you move overseas, there are a few pointers to consider before choosing an insurance policy.

  1. Geographical Coverage: Most health insurance policies specify in terms and conditions about the geographical restrictions of the insurance coverage. Also, most of the health insurers in India provide cover for medical expenses incurred in India only.  Therefore, if you are an NRI looking for a health insurance policy in India, and need cover irrespective of your geographical location, there are very few policies available and they provide cover only for certain expenses like an organ transplant, treatment of cancer etc.
  1. Underwriting restrictions for NRIs: NRIs are considered risky by insurance companies to provide health cover. The reason for this being the fact that it is extremely difficult for them to corroborate the claims and verify the genuineness of the same, for a person residing outside India. Thus, it becomes important for you to choose a suitable plan accepting NRIs for health coverage.
  1. FEMA Regulations: The Foreign Exchange Management Act specifies that if you are non-resident of India and purchase any policy from an insurer in India, any claim payouts from the insurer can be repatriated out of India, only up to the amount of premium paid in foreign currency. This implies that even if you make a claim for medical expenses in India and it is settled by the insurer, you cannot repatriate more than the premium you have paid for the health policy.
  1. Online Purchases of Health policies: With technological advancement, health policies can be purchased online. However, you will still be required to undergo medical tests before the policy becomes effective. It is advisable to time your online policies purchase with the intended time of visit to India. If medical tests are conducted in India, then the cost of medical examination gets included in the policy premium. If the same is done abroad, the cost of it might exceed the premium you are paying for the policy in India.

Final Words

NRIs are eligible to buy health insurance in India either as a precaution or for providing health coverage to parents or for cost-effective medical treatment. However, before buying a new policy or deciding to continue an existing policy, a lot of factors like geographical restrictions, local regulations, pre-existing diseases have to be carefully considered.