Dubai: Many NRIs have been confused about whether to buy health insurance in India or the UAE. Many NRIs migrate abroad and often face this dilemma. As an NRI, there are several factors that you should take into account when deciding whether to purchase health insurance in India.
Health insurance premiums in India are considerably lower than what you would pay in other countries. This is because the cost of medical treatments in many developed countries, especially the United States, is simply too high.
Compared to most other developed countries, health insurance premium rates in India are very low and a family of four can get coverage of 2 million INR (98,967 Dh) for around 70,000 INR (3 463) at INR 80,000. (Dh3.958) per year.
Is coverage of Indian plans limited?
However, most Indian health insurers only reimburse hospital costs incurred in India. For example, if you are staying in Dubai and are hospitalized, your Indian health policy will usually not cover it.
Some insurers offer health contracts with comprehensive coverage, but not all comprehensive coverage is designed the same. For example, some only offer global health coverage in emergencies. Others only provide it in the event of scheduled hospitalization.
In the latter case, you will also need to get approval from an Indian resident doctor. There could be other restrictions and exclusions, and health policies with comprehensive coverage are also expensive.
Some premium policies cover life-threatening emergencies if they occur in a foreign country, but even they require a very high copayment from the insured.
There are also policies that cover medical expenses incurred abroad if such treatment and the required medical infrastructure does not exist in India.
Since Indian plans are low cost, you should buy it?
However, the low premium rates do not mean that NRIs always have to buy health insurance in India, reiterate several experts.
A health plan purchased in India is intended to cover the expenses of medical treatment in India. Almost all health insurance policies have geographic restrictions, which require that expenses incurred outside of India not be covered.
This geo-restrictions clause is buried in the fine print of the terms and conditions, so you might not notice it when requesting a policy.
But that will make politics unnecessary if you are not in India. This is also why Indians going to study abroad are encouraged not to rely on health insurance plans purchased in India but to take out a policy in the country of destination.
Who are excluded from purchasing Indian health care plans?
It has been repeatedly informed that NRIs from countries on the “FATF” blacklist / call to action are excluded from coverage and cannot be applied. FATF stands for Financial Action Task Force, a group of countries working together to fight money laundering and terrorist financing.
Most health insurance policies have a clause that the policyholder must be an Indian resident to be able to claim outside India, so no more than six months should be spent outside of India in a calendar year.
However, if you are going abroad alone and your parents and / or children stay in India, you can continue with the “family floater” policy. (The policy will cover medical costs in case your family members are hospitalized.)
Are there any tax advantages to opting for an Indian diet?
When it comes to claiming tax benefits, an NRI can do so if they already pay taxes on income earned in India.
A natural person (resident or non-resident) can claim a deduction of up to INR 25,000 (Dh 1,237) for premiums paid for health insurance for himself, his spouse and his dependent children, including up to 5,000 INR (247.42 Dh) for preventive health checks, under Section 80D of the Income Tax Act of India.
However, if the person is an elderly person (over 60) then they can claim a deduction of up to INR 50,000 (Dh 2,474.20) for premiums paid for health insurance for themselves, his spouse and dependent children.
Verdict: should you take out health insurance in India?
Buying health insurance in India makes sense if the NRI returns to their home country or intends to do so in a few years.
It is advisable to purchase insurance well in advance as most policies have a cooling off period of 1 to 2 months before certain illnesses are covered. This way, you won’t have to rush to buy health insurance immediately after you arrive in India.
If the NRI family has a history of diabetes or heart disease or there is a newborn baby in the family, it may pay off to purchase insurance well before you want to come to India. Some pre-existing conditions such as diabetes and heart conditions are not covered by insurance for the first four years.
For some other conditions, such as ENT disorders, hernia and osteoporosis, the waiting period can be 1 to 2 years. There is also a 90 day waiting period for infants. So even if you will have to pay a premium for 2 to 4 years without receiving any benefits, it is still cheaper than not taking out insurance.
Thus, the length of stay is one of the important factors that you will need to consider. If you plan to stay abroad for a shorter period, around three to four years, then it would be beneficial for you to purchase a health insurance policy in both countries.
Don’t stop paying premiums for your Indian health policy. This way, you can maintain lower premiums and make claims, if necessary, upon your return without having to go through a pre-existing illness (PED) waiting period.
On the other hand, if you have a long term plan to stay abroad, you don’t need to purchase health insurance in India. It is best to take out a policy in the country of your residence. For short trips to India, travel insurance is a cheaper way to insure, experts say.
It also makes perfect sense to purchase medical insurance while traveling to India for vacation or business. It might just be a 5-6 day trip, but don’t travel without medical insurance. General insurance companies now offer personalized plans that can fit your pocket.
For less than INR 1,600 (Dh 79.17), one can buy coverage from INR 1.5 million (Dh 74,225.88) to INR 2 million (Dh 98,967.84). Be careful of a co-pay clause when purchasing such a plan.