Imagine Priya, an NRI living in London, who is planning an annual trip back to India. While she is well-covered by a comprehensive health insurance policy in the UK, she is contemplating whether she should also purchase a health insurance plan for her time in India. The premiums in India are notably lower, which piques her interest. Let’s explore if it’s worth investing in a separate health insurance policy or if a travel insurance policy would suffice.
The Risk of Overlooking Health Coverage
When NRIs like Priya travel to India, they might face significant challenges if they fall sick or need hospitalization. Without adequate coverage, the high costs of medical treatment can become financially burdensome. This is particularly concerning given that healthcare expenses in India, though generally lower than in many developed countries, can still be substantial.
Insurance Options to Consider
Should NRIs buy a separate health insurance policy for their time in India, or is a travel insurance policy sufficient?
Comparison
To make an informed decision, let’s compare the two options: Travel Insurance and Health Insurance.
Travel Insurance
1. Coverage for Hospitalization: Travel insurance typically provides coverage for medical emergencies during the trip. However, the coverage might be limited and come with specific clauses, such as caps on the amount payable or restrictions on the types of treatment covered.
2. Geographical Limitations: Travel insurance is designed to cover expenses incurred while traveling and usually does not extend beyond the duration of the trip. Once the trip ends, the coverage ceases, leaving gaps if the individual falls ill shortly before or after the trip. It is only valid for the duration of the trip and within specific geographical areas.
3. Claims Process: Travel insurance claims can sometimes be cumbersome, especially if dealing with a foreign insurer. There may be language barriers, and the process might not be as streamlined as with local policies.
Health Insurance in India
1. Comprehensive Coverage: Health insurance policies in India often offer broader coverage and may include additional benefits such as coverage for pre-existing conditions after a waiting period, maternity benefits, and wellness programs.
2. Lower Premiums: The cost of health insurance in India is considerably lower compared to international policies. For instance, a plan covering up to Rs 10 lakh for a family of four can be obtained for approximately Rs 20,000-25,000 annually, often with options for add-ons like super top-up plans.
3. Cashless Treatment: Many Indian insurers offer cashless treatment facilities, which means the insured does not have to pay upfront and claim reimbursement later. This can simplify the process significantly.
4. Long-Term Financial Sense: For NRIs who visit India frequently or plan to return permanently, having an Indian health insurance policy can be financially advantageous. It ensures coverage during visits and can be cost-effective over time, especially with long-term policies offering discounts.
5. Tax Benefits: Health insurance premiums paid in India qualify for tax deductions under Section 80D of the Income Tax Act. NRIs who file returns in India can benefit from deductions up to Rs 25,000 for themselves and their families, and up to Rs 25,000 for parents. If the parents are senior citizens, the deduction increases to Rs 50,000.
The Case for Purchasing Health Insurance in India
For NRIs like Priya, purchasing health insurance in India can be a prudent decision for several reasons:
Coverage During Visits: Provides peace of mind with medical coverage during trips to India, which can be crucial in case of unforeseen emergencies.
Financial Benefits: Lower premiums and potential tax benefits make it a cost-effective option.
Future Relocation: If Priya plans to relocate to India in the future, purchasing a policy now can help complete waiting periods for pre-existing conditions and ensure comprehensive coverage.
If an NRI plans to return to India later in life and hasn’t already purchased a health insurance policy, they may face difficulties in getting coverage due to existing medical conditions. Health insurance providers may either reject their application or impose higher premiums and strict exclusions. By buying a policy earlier, NRIs can avoid these issues and ensure they have coverage when they need it most.
To Sum Up
In summary, while travel insurance might cover emergency medical expenses during a short visit, a dedicated health insurance policy in India offers broader and often more affordable coverage. For frequent visitors or those planning a future return to India, the benefits of an Indian health insurance policy—such as lower premiums, comprehensive coverage, and tax advantages—make it a valuable investment. By securing a policy at a small sum now, NRIs can safeguard themselves against high medical costs and enjoy their time in India with added financial security.
