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For NRIs, buying health insurance in India is now a smart financial planning move, helping secure care for elderly parents, prepare for a future return and manage tax obligations.
Indian health insurance policies stand out for their affordability. (Representative Image)
For non-resident Indians (NRIs), purchasing health insurance in India is not primarily about overseas medical coverage. Instead, it is a strategic financial decision linked to safeguarding interests back home. Whether it involves securing healthcare for elderly parents, planning for a future return to India or managing tax obligations on Indian income, domestic health insurance has emerged as a practical financial planning tool rather than just a medical necessity.
Indian health insurance policies offer advantages such as affordability, simpler claim settlement within the country and eligibility for tax deductions. These factors make them particularly relevant for NRIs who maintain strong financial and familial ties with India.
Health Insurance for Parents and Future Return Plans
A majority of NRIs invest in health insurance policies to cover their parents who reside in India. This ensures access to quality healthcare without sudden financial strain. Another segment of NRIs, especially those employed in Gulf countries, purchase health insurance for themselves in India as part of long-term return planning, given the uncertainty around permanent residency in those regions.
Explaining the limitations of Indian policies abroad, Siddharth Singhal, head of health insurance at Policybazaar, as per Money Control, said, “One key reason is pricing and currency mismatch. Health policies purchased in India are denominated in rupees, while treatment and claims overseas are in local foreign currency, making them less viable.”
Why Overseas Coverage Under Indian Policies Is Limited
Most NRIs prefer buying health insurance in the country they currently reside in, as local policies are better aligned with medical costs and healthcare 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 Indian Insurers Are 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 themselves. While the core benefits remain similar to those available to resident Indians, these plans are subject to standard conditions, including waiting periods, exclusions, and documentation requirements.
According to Singhal, insurers are offering these benefits because they understand the unique behaviour and risk profile of NRI customers, provided all regulatory and documentation norms are fulfilled.
Tax Benefits on Health Insurance for NRIs Explained
One of the most significant advantages of buying health insurance in India is the availability of tax deductions on premiums paid. Even as India transitions its tax framework under the Income Tax Act, 2025, the core tax benefits for NRIs remain unchanged.
NRIs, like resident Indians, can claim deductions of up to Rs 25,000 for premiums paid for themselves or family members. For senior citizen policies, the deduction limit increases to Rs 50,000. Additionally, preventive health check-ups are eligible for a separate deduction of up to Rs 5,000 annually.
Premium payments must be made through approved channels such as NRE, NRO or FCNR accounts or other recognised digital payment methods.
Choosing the Right Tax Regime and ITR Form
Health insurance tax deductions are applicable only if NRIs opt for the old tax regime. While the new regime offers lower tax slabs, it largely eliminates common 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. Those with business or professional income in India must use ITR-3.
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Delhi, India, India
February 20, 2026, 12:26 IST
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