Health Insurance in India for Non-Resident Indians and Expatriates

chillibreeze writer — Debanjan Sengupta

So you’ve landed that dream job which gives you a plum overseas posting. That’s great news for you and a moment of pride for your parents who have strived to give you an education and an upbringing that has made this possible. But it is not often that the son or daughter is able to take his or her ageing parents along so that they can be well taken care of. What does one do in such a scenario? How does an NRI make sure that in his absence, his parents do not suffer due to lack of proper medical care? An effective health insurance cover for your parents is a small but eloquent gesture of gratitude for all that your parents have done for you over the years, and is a sure-fire way of ensuring peace of mind for yourself regarding your parents’ well being.

After you have decided to go in for a health insurance plan for your parents, you need to familiarize yourself with some of the jargon that you are sure to encounter when you begin shopping around for the right policy to suit your needs.

At its core, health insurance refers to the reimbursement of unforeseen medical or hospitalization expenses in return for a fixed premium to be paid once a year. The amount of premium to be paid and the maximum amount of medical expenses that will be reimbursed to the beneficiary depends on many factors, the most important of which are the age and the physical condition of the insured at the time of opting for insurance.

When you want to insure more than one member of the family, you can opt for a family floater policy, where the premium required is higher than that required for a single beneficiary, but lower than that required for the sum of all beneficiaries of the family insured individually.

You can opt for a cashless facility in which the insurer issues a medical identity card to the insured, and this card can be used by the insured person or his/her family, to directly clear the expenses of hospitalization partly or wholly in certain enlisted hospitals, instead of paying cash at the time of discharge and later on claiming reimbursements from the insurer.

Some policies have the option of covering pre-hospitalization and post-hospitalization expenses for periods ranging from 30 to 90 days. These expenses are usually for tests, medicines, physiotherapy etc. and would be most likely for conditions which might not require hospitalization.

Pre existing diseases of an insured person are usually not covered by insurance companies, but if a policy holder has continued his policy with the same insurer for a few years, then the insurer might decide to also cover the expenses of hospitalization arising due to the pre existing disease. A similar facility is what insurers refer to as a no claim bonus, which is offered on renewal of a policy, if no hospitalization benefits are claimed on a policy during the previous year. This bonus could be offered either in the form of reduced premium, or by increasing the sum assured. Another way of rewarding beneficiaries, who have not had any claim for a few consecutive years, is by offering a free annual health check up.

Questions to ask the insurance company
Even after you have familiarized yourself with the terminology used by insurance companies, it is important for you to ask further questions of your insurer when you finally set out to select that health insurance policy, so that there are no nasty surprises at the time when you actually claim reimbursements from the insurer. First, ensure that check ups, testing and doctor visits are also covered under the policy. Since you are not likely to be around when the policy is actually invoked, it is a good idea to also include critical illnesses, infectious diseases and accidents in the policy, even if it means a slightly higher premium. Do read the fine print carefully to be fully aware of which conditions are not covered under the policy. Get a list of hospitals which have a tie up with your insurer, and familiarize your parents with the hospitals closest to their home.

If tax savings are also something you want your health insurance policy to provide, then you need to check the tax laws of the country you are working in, and cross check these clauses with the insurer from whom you are about to purchase the policy. In India, a new direct tax regime is expected to come into force within the next couple of years, and it has suggested some changes in the prerequisite conditions that will make a person working abroad eligible to be considered a resident. At present, you are considered a resident of India if you stay in India for 182 days or more in a particular year. But the new direct tax regime proposes that if an NRI spends more than 60 days in a particular year or more than 365 days in the last four tax years in India, then he would be considered a resident Indian. An NRI’s global income would become taxable in India if his stay in India during the last 7 tax years exceeds 729 days and if he has been a resident for 2 out of the last 10 tax years.

Paperwork
Once you have considered all possible options and their implications and effectiveness, and chosen the policy you will take, you need to complete the paperwork for the policy and also pay for it. The good thing about health insurance is that it is an annual policy, so all paperwork and premium payments need to be done only once a year. You would be required to complete the policy proposal by filling up the required forms, which might include an NRI questionnaire. Medical reports and a moral hazard report also need to be submitted. A copy of your passport and a proof of your income are also required. Proof of income could be either the last income tax return filed, or in its absence, the employment letter stating the salary. All these should ideally be completed by you before leaving India, or during your annual visit to India, but you also have the option of sending these documents to your insurer by post or preferably by a dependable courier.

Payment procedures
Premiums for a health insurance policy taken by an NRI for his dependants in India can be paid either by direct remittance through banking channels, or by cheque or cash. The cheques could be drawn on the purchaser’s NRE account or on an account held singly or jointly by him in India. The NRI’s resident parents or spouse could also issue the cheque from their resident accounts. The NRI’s parents or spouse could also pay the premium in cash, and the payment should be accompanied by a letter from him or her stating the nature of relationship with the NRI. If premiums are paid in cash or from an account held in India, then the claim settlement, if any, will also be in India and cannot be in foreign exchange. Claims settlement can be in foreign exchange only in the same proportion in which the premiums have been paid in foreign exchange. Apart from the above, it is also possible for a policy premium to be paid by the NRI’s employer in India, or by the absolute assignee to whom he has assigned the policy. The modes and currency of payment allowed, as well as the modalities and preconditions for claims settlement might vary from one insurance company to the other, and also depend on the specific tax laws of the country where the NRI is working in. Hence these should be discussed threadbare with the insurer before closing the deal, to avoid complications later on.

Travel insurance
An NRI would require health insurance for his dependants on another occasion – when they are visiting him. For overseas travel, health insurance is generally clubbed together with other some protections under the name of Travel Insurance. A travel insurance policy would not only cover the medical or hospitalization expenses during overseas travel, but also baggage losses and flight delays at airports, loss of passport and theft of luggage. Many Indian general insurance companies offer overseas travel insurance, and the good news is that most of these companies offer the option of purchasing these policies online through their websites. Once you have finalized your parents’ travel plans, you can spend some time surfing the websites and complete the purchase online. Many ticketing companies have also begun offering travel insurance packages bundled with the air tickets which can be opted for at the time of booking of flight reservations.

And finally, an NRI might also require health insurance for himself during his visits to India. Although healthcare in India is still much cheaper than in most developed countries, yet a health cover can help avoid unplanned expenses in case a sudden medical expense crops up during your visit to India. This doesn’t seem to be too popular a policy with insurance companies yet, and Indian Overseas Bank is the only bank at present that offers such a policy for NRIs visiting India for a short duration. Apart from the usual cover for accident, illness and surgery, this policy also has an option of maternity benefits, child care and free health check up after three claim free years.

In these days of nuclear families and Empty Nest parents staying back in India after their children have gone abroad for better employment opportunities, buying a comprehensive health insurance plan for his dependents is the least that an NRI can do to show his parents that out of sight is not out of mind. Make health insurance a part of your travel plans while leaving for that job in a foreign land, and you can be at peace regarding your loved ones back home.

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Chillibreeze's disclaimer: This is a contributed article and was published on Chillibreeze in November, 2010. The views and opinions expressed in this article are those of the author(s) and do not reflect the views of Chillibreeze as a company. Chillibreeze has a strict anti-plagiarism policy. Please contact us to report any copyright issues related to this article. The relevance of the facts and figures cited (if any) could change after a period of time.

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Health Insurance in India for Non-Resident Indians and Expatriates

chillibreeze writer — Debanjan Sengupta

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