NRIs can now buy term insurance in USD from India: Policybazaar explains how new plan protects against currency risk

Non-Resident Indians (NRIs) looking to buy US dollar-denominated term insurance plans in India will now have an option as Policybazaar has started offering such plans through its partner insurers. NRIs can buy such insurance plans through India’s International Financial Services Centre (IFSC) at GIFT City, Policybazaar said in a statement on Monday.

The new product allows NRIs to pay premiums in US dollars and receive claim payouts in the same currency, addressing one of the biggest but least discussed financial risks faced by Indians living overseas - currency depreciation, Policybazaar said.

Over the last few years, the IFSC has enabled several banking, investment and insurance solutions that were traditionally available only through overseas financial centres.


“With this step, global Indians can now access internationally aligned financial products while remaining within India's regulatory framework,” says Policybazaar.

Premiums and claim payouts in US dollars

Term insurance plans offered through GIFT City will allow policyholders to pay premiums in US dollars. In the event of a claim, the nominee will also receive the payout in the same currency.

According to Policybazaar, this is intended to address the currency mismatch faced by many NRIs who earn in US dollars but hold life insurance policies denominated in Indian rupees.

Why currency depreciation matters for NRIs

Many NRIs have financial commitments including home loans, children's education expenses and day-to-day living costs abroad, while also supporting family members in India.

Policybazaar said that life insurance purchased in India has traditionally been issued in rupees. Over time, depreciation of the rupee against the US dollar can reduce the purchasing power of the insurance payout.

The company explained that over the past three decades, the Indian Rupee has depreciated by nearly 3% annually against the US Dollar. This substantially reduces the international purchasing power of a rupee-denominated insurance payout over time.

It said that a Rs 2 crore life insurance cover was worth around USD 5,50,000 in 1996, when one US dollar was about Rs 35. At current exchange rates, the same cover would be worth around USD 200,000.

By denominating the policy and claim amount in US dollars, the insurance cover remains aligned with the currency in which many NRIs earn and meet their long-term financial obligations.

How US dollar payouts benefit NRI families

Apart from protecting against currency fluctuations, the product also makes claim payouts more meaningful for families living overseas. Since benefits are paid in US dollars, beneficiaries do not have to worry about exchange rate movements at the time of claim. This provides greater certainty while meeting long-term financial commitments abroad, the release said.

Digital purchase process

Policybazaar said the entire buying process has been designed to be digital. Eligible customers can complete onboarding and medical underwriting remotely, making it easier for NRIs across the world to access protection from India.

GIFT City

GIFT City (Gujarat International Finance Tec-City) is India's first operational smart city and designated International Financial Services Centre (IFSC). Located in Gandhinagar, Gujarat, it functions as a global financial and IT hub designed to bring offshore financial transactions back to Indian soil under a unified regulator.