Affordability of Indian insurance products

The number of NRIs purchasing insurance in India has surged by over 50% in the past two years, driven by affordable premiums and competitive offerings, according to a report by Policybazaar.

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Indian policies provide high coverage at a fraction of the cost compared to the U., UK, or UAE. For instance, a ₹1-crore term policy might cost just ₹5,000-10,000 annually. Health insurance is similarly more affordable, thanks to the country’s lower healthcare costs due to policies such as the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB PM-JAY).

Regional insights: GCC and high-income countries lead

The Gulf Cooperation Council (GCC) countries — UAE, Saudi Arabia, Qatar, Oman, and Kuwait — lead the market for NRI health and term insurance, representing 60% of total sales, according to the Policybazaar report..

NRIs in high-income nations like US and UK are more likely to opt for higher sums assured due to their higher income levels and cost of living. For instance, the average sum assured in the US is ₹2.5 crore, the highest across any region.

“NRIs from the UAE, US, and Saudi Arabia form a major chunk of the NRI customer base as they seek the dual benefits of protection and wealth creation through India’s competitive premiums and high-growth investment products,” said Tarun Mathur, Co-founder and CBO of Policybazaar.com.

Tax benefits from insurance coverage

Insurance premiums often qualify for tax deductions under Section 80C, further reducing the overall cost of insurance for individuals.

This is why NRIs, especially from the Gulf, US, and Saudi Arabia, are increasingly opting for life, health, and investment-linked products in India.

Demographic shift and health insurance surge

According to the report, NRIs now account for 12% of total term insurance customers in India. The growth is part of a broader trend that mirrors India’s aging demographic or the so-called ‘demographic shift,’ with the elderly population expected to nearly double by 2050, according to UN estimates.

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The shift towards insurance products, both for personal coverage and for securing the financial futures of aging relatives in India, is rapidly increasing in tandem with this demographic change.

Improving healthcare 

NRI health insurance has experienced remarkable growth, with premiums jumping 140% in FY 2023-24. India’s improving healthcare infrastructure, coupled with lower premiums compared to countries like the US and UAE, has made health insurance a key consideration for NRIs.

“With a majority of NRI buyers between the ages of 31-40, the need to safeguard families across borders is more relevant than ever,” Mathur added.

Reference From Below Link

https://www.cnbctv18.com/personal-finance/nri-high-demand-for-indian-insurance-products-low-premium-better-healthcare-aging-population-explainer-19505653.htm