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Shivam Shukla recently moved to Dubai for a job. While the 27-year-old is not planning to come back anytime soon, he is confused about whether to buy health insurance in India or the UAE.

Like Shukla, there are many NRIs who migrate abroad and often face this dilemma. As an NRI, there are several factors you need to consider on whether you should buy health insurance in India.

Most Indian health insurers only reimburse hospitalization expenses incurred in India. For instance, if you are staying in Dubai and get hospitalized, your Indian health policy typically would not cover it.

Some insurers do offer health policies with global cover, but not all global covers are designed the same. For instance, some only provide global health coverage in case of emergencies. Others only provide it in case of planned hospitalization.

In the latter case, you would need to take an Indian resident doctor’s approval as well. There could be other restrictions and exclusions, and health policies with global covers are also expensive.

“NRIs from FATF blacklist/call-for-action countries are excluded from the coverage," said Biresh Giri, appointed actuary, head - product development and CRO, ACKO Insurance. “FATF stands for Financial Action Task Force, a group of countries that works together to combat money laundering and terror financing."

Amit Chhabra, head - health insurance, Policybazaar.com, added: “Most health insurance policies have a clause that the policyholder should have to be an Indian resident to be able to claim outside India, so one should not spend more than six months outside India in a calendar year."

However, if you are going abroad alone and your parents and/or children are staying back in India, then you can continue with the family floater policy. The policy will indemnify medical expenses in case your family members get hospitalized.

Tax benefits

When it comes to claiming tax benefits, an NRI can do so if he/she is a taxpayer in India. An individual (resident or non-resident) can claim a deduction of up to 25,000 for premiums paid for health insurance for self, spouse and dependent children, including up to 5,000 for preventive health check-ups, under Section 80D of the Income Tax Act. However, if the individual is a senior citizen (above 60 years of age), then he/she can claim a deduction of up to 50,000 for premiums paid for health insurance for self, spouse and dependent children.

Should you buy?

The duration of stay is one of the important factors you will have to consider. “If you are planning to stay overseas for a shorter duration, around three-four years, then it would be advantageous for you to buy a health policy in both countries. Do not stop paying premiums for your Indian health policy. This way you can keep premiums lower and make claims, if needed, as soon as you return without having to go through a waiting period for pre-existing diseases (PEDs)," said Prateek Mehta, co-founder and chief business officer, Scripbox.

“On the other hand, if you have a long-term plan to stay abroad, then you don’t need to take health insurance in India. You are better off buying a policy in the country of your residence. For short trips to India, travel insurance is a cheaper way to get insured," he added.

Besides, health insurance policies usually come with geographical limitations. So, you must fully internalize the terms and conditions before making a decision.

“A lot depends on your future plan of returning to India. NRIs need to be careful of underwriting guidelines by the health insurer and also of regulations under the Foreign Exchange Management Act (Fema)," said Raj Khosla, managing director, MyMoneyMantra.com.

For instance, a health policy may not include hospitalization expenses incurred in the UAE, while it may be applicable only on select critical illnesses such as cancer. Since it is difficult to assess and verify the claims abroad due to the risk perspective, the insurers impose geographical limitations on health policies bought by NRIs.

“If an NRI does buy a health insurance policy in India, he/she can make payments in INR. They can use credit cards and NRE/NRO bank accounts to pay the premiums. The settlement of such claims would be in INR only. Under Fema regulations, the RBI also allows NRIs to pay for health insurance premiums in foreign currencies. Claims arising out of India in such policies would be settled in the respective foreign currency," said Mehta.

Mint takeaway

Like Shukla, if you are going abroad with your family for a longer duration, then you must not buy a health policy in India as it will incur an unnecessary expense on your pocket. However, if you are planning to go for a shorter period, say three-four years, then you can buy a health policy in India. This will help you make hassle-free claims when you are back in India as the waiting periods for PEDs will almost get over.

Do you have personal finance queries? Send them to mintmoney@livemint.com and get them answered by industry experts

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