Term insurance purchases by non-resident Indians (NRIs) have doubled in two years and increased 35 per cent in March from the month before amid the Iran war, said a report by Paisabazaar on Tuesday, noting that the trend shows the urgency among “globally mobile Indians” to secure financial protection for families back home.
Younger NRIs drive a protection-first shift
People aged 25 to 35 accounted for 54 per cent of total NRI term insurance demand last year, up from 44 per cent in 2024. This marks a notable change in financial priorities, with younger people opting to secure life cover earlier, said the report.
This shift reflects a broader move towards “protection-first” financial planning. With rising incomes and dependents in India, younger NRIs are increasingly viewing term insurance as a foundational financial product rather than a later-life purchase.
West Asia tensions trigger demand spike
NRIs in West Asia contribute over half of total term insurance demand. A 35 per cent month-on-month increase in term insurance purchases has been observed following the latest regional conflict.
This reaction underscores how geopolitical uncertainty directly influences financial behaviour. For many NRIs working in volatile regions, term insurance serves as a critical safeguard to ensure financial continuity for their families in India in case of unforeseen events.
Among key markets:
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The UAE leads in demand, supported by a large Indian expatriate base -
The US and Canada follow, along with the UK -
Saudi Arabia and Qatar also show strong uptake trends
Coverage preferences reflect income level
NRI buyers are aligning coverage amounts with their income levels, but the emphasis remains firmly on adequate protection rather than cost minimisation.
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High-income earners (above Rs 40 lakh annually) typically opt for Rs 3–5 crore cover -
Mid-income groups (Rs 20–40 lakh) prefer Rs 2–3 crore cover -
Entry-level earners (below Rs 20 lakh) usually choose around Rs 1 crore cover
This pattern indicates a structured approach to income replacement, ensuring that dependents can maintain their standard of living even in adverse circumstances.
Strong tilt towards pure protection plans
A clear preference has emerged for straightforward term insurance products over investment-linked variants.
Around 80 per cent of NRIs opt for pure term plans instead of return-of-premium products
Nearly 85–90 per cent choose limited pay options, completing premium payments early while retaining long-term cover
A majority (67 per cent) opt for coverage extending beyond 70 years, reflecting long-term security planning
This suggests that NRIs are prioritising simplicity, affordability, and clarity in insurance products.
Riders highlight risk awareness gaps
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Add-on riders provide insight into how NRIs perceive different risks: -
Accidental total and permanent disability (ATPD) riders have a 40 per cent adoption rate -
Accidental death riders are chosen by 30 per cent of buyers -
Critical illness rider adoption remains relatively low at 7 per cent, though it has nearly doubled from earlier levels
While awareness of accident-related risks appears high, the relatively low uptake of critical illness cover indicates a gap in understanding health-related financial risks.
Cost advantage and digital ease drive purchases
One of the key reasons NRIs are buying term insurance from India is cost efficiency. Premiums are typically 20–30 per cent lower than comparable international policies, making them significantly more attractive.
In addition, the buying process has become largely digital:
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Video-based medical examinations -
Minimal paperwork -
Faster policy issuance
These features enable NRIs to purchase policies seamlessly from anywhere in the world.
Improved claims confidence boosts trust
Another important factor supporting demand is improved awareness around claims processing. Most NRIs now understand that claims can be handled digitally, without the need to be physically present in India.
Key features include:
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Digital claim submission and processing -
Payouts credited to NRE/NRO accounts in India -
Availability of partial payouts for immediate expenses
This has helped build trust in the system and reduced concerns about claims settlement from overseas.
What this means
The sharp rise in term insurance adoption among NRIs reflects a structural shift rather than a temporary spike. Global uncertainty, combined with increasing financial awareness and digital access, is accelerating the move towards risk protection.
For NRIs, especially those with dependents in India, term insurance is increasingly becoming a non-negotiable component of financial planning.