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For NRIs, buying health insurance in India is now a smart financial planning move, helping to secure care for elderly parents, prepare for future returns and manage tax liabilities.
Indian health insurance policies are unique for their affordability. (representative image)
For non-resident Indians (NRIs), buying health insurance in India is not primarily about overseas medical coverage. Instead, it is a strategic financial decision tied to the protection of domestic interests. Whether it involves ensuring healthcare for elderly parents, planning to return to India in the future or managing tax obligations on Indian income, home health insurance has emerged as a practical financial planning tool rather than just a medical necessity.
Indian health insurance policies offer benefits like affordability, simple claim settlement within the country and eligibility for tax deductions. These factors make them particularly relevant for NRIs who maintain strong financial and family ties to India.
Health insurance and future withdrawal plans for parents
Most NRIs invest in health insurance policies to cover their parents living in India. This ensures access to quality health care without sudden financial stress. Another section of NRIs, especially those employed in Gulf countries, buy health insurance for themselves in India as part of a long-term return plan, given the uncertainty around permanent residence in those regions.
According to Money Control, Siddharth Singhal, head of health insurance at PolicyBazaar, explained the limitations of Indian policies abroad, saying, “A major reason is pricing and currency mismatch. Health policies purchased in India are denominated in rupees, while treatments and claims abroad are in the local foreign currency, making them less viable.”
Why is overseas coverage limited under Indian policies?
Most NRIs prefer to buy health insurance in the country where they currently reside, as local policies are better aligned with medical costs and health care systems there. While a handful of Indian health insurance plans offer overseas treatment coverage, they are generally unsuitable for NRIs due to cost and coverage limitations.
How are Indian insurance companies adapting for NRIs?
To attract the NRI segment, Indian insurers have introduced targeted incentives such as discounted premiums for policies purchased for parents, families or the policyholder himself. While the core benefits are similar to those available to resident Indians, these plans are subject to standard terms, including waiting periods, exclusions and documentation requirements.
According to Singhal, insurers are offering these benefits because they understand the unique behavior and risk profile of NRI customers, provided all regulatory and documentation norms are met.
Tax benefits on health insurance for NRIs explained
One of the most important benefits of buying health insurance in India is the availability of tax deduction on the premium paid. Even though India has changed its tax structure under the Income Tax Act, 2025, the main tax benefits for NRIs remain unchanged.
Non-resident Indians, like resident Indians, can claim a deduction of up to Rs 25,000 on premiums paid for themselves or family members. For senior citizen policies, the deductible limit increases to Rs 50,000. Additionally, preventive health checkups are eligible for a separate deduction of up to Rs 5,000 annually.
Premium payment should be made through approved channels such as NRE, NRO or FCNR accounts or other recognized digital payment methods.
Choosing the right tax regime and ITR form
Health insurance tax deduction is applicable only if NRIs opt for the old tax regime. While the new regime offers lower tax slabs, it largely eliminates the usual deductions, including Section 80D benefits.
NRIs earning income from salary, rent, capital gains or other sources can file ITR-2, provided they have no business income. People with business or professional income in India should use ITR-3.
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Delhi, India, India
February 20, 2026, 12:26 IST
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