NRI term insurance demand doubles in 2 years; West Asia tensions trigger 35% surge

Demand for term insurance among non-resident Indians (NRIs) purchasing policies from India has doubled over the past two years, with geopolitical tensions in West Asia driving a sharp spike in recent months, according to data from Policybazaar. 

The report noted a 35% month-on-month surge in term insurance purchases following the recent West Asia conflict, as NRIs increasingly prioritise financial protection for families back home. 

The growth in adoption has been led by younger buyers, with individuals aged 25–35 now accounting for 54% of total demand, up from 44% in 2024. This reflects a shift towards protection-led financial planning among globally mobile professionals. 

West Asia emerges as key growth hub 

West Asia accounts for over 50% of total demand, led by countries such as the UAE, followed by the US, Canada, and the UK. Saudi Arabia and Qatar are also contributing significantly, underlining the region’s importance in driving NRI insurance uptake. 

The study found that coverage choices among NRIs are closely linked to income levels: 

High-income earners (above ₹40 lakh) typically opt for ₹3–5 crore cover, focusing on long-term income replacement. 

Mid-income groups (₹20–40 lakh) prefer ₹2–3 crore coverage. 

Entry-level earners (below ₹20 lakh) tend to choose ₹1 crore policies, balancing affordability with protection needs. 

Shift towards pure protection and long-term cover 

Nearly 80% of NRIs prefer pure term insurance plans over return-of-premium products. Additionally, 85–90% opt for limited pay options, allowing them to complete premium payments early while retaining long-term coverage. 

A majority of policyholders are now opting for extended coverage durations, with 67% choosing cover beyond 70 years and 32% opting for coverage up to 60–70 years. 

There is strong uptake of riders covering accidental risks, with 40% opting for accidental total and permanent disability cover and 30% for accidental death benefits. Adoption of critical illness riders, though still relatively low, has nearly doubled from 4% to 7%. 

The report noted that digital distribution is playing a key role in boosting NRI participation. A majority of NRIs now find digital claim management convenient, with features such as video medicals, minimal documentation, and quick issuance enabling seamless policy purchases from abroad. 

Claims can be processed digitally with payouts made to NRE/NRO accounts, including partial settlements for immediate expenses, improving transparency and trust. 

Cost advantage and tax benefits 

Term insurance purchased from India offers premiums that are 20–30% lower than international markets, along with tax-free claim payouts, making it an attractive option for NRIs seeking cost-effective protection. 

“Term insurance is no longer a decision NRIs are postponing. Purchases from India have doubled, largely driven by younger, digitally savvy professionals,” said Varun Agarwal, while adding that the recent surge in demand underscores how global uncertainties are prompting NRIs to secure financial protection for their families in India.