Indian health insurance becomes more attractive for NRIs with GST refund – ET HealthWorld

By Siddharth Singhal

Wealth creation, career progression, exposure to better opportunities – these are some of the common reasons why more than 25 lakh people migrate to foreign countries from India every year. When laying the foundation for their future, NRIs cannot afford to exclude the most critical element of financial security: health insurance. The simple increase in medical emergencies as well as healthcare costs around the world can throw families into financial distress in no time. Most applicable to NRIs, this provides a vital safety net protecting their families back home, especially elderly parents. Remember that if they needed medical care while visiting India, being without health coverage could be a financial problem.

While the insurance industry has made significant strides in making health insurance more accessible and affordable for NRIs, the latest development in tax refunds is a welcome step towards greater accessibility. NRIs can now leverage tax regulations to their advantage while acquiring Indian health insurance. Since NRIs already fulfill their tax obligations in their country of residence, they are entitled to an 18% GST refund while purchasing an Indian health insurance plan.

Who is entitled to it?

GST refunds on health insurance begin with the applicant, who initiates and applies for the policy. So, if you are applying for yourself or for your family residing in India, you will be the applicant of the policy. To avail the benefit, the applicant must be an NRI, while the insured does not necessarily need to be an NRI, as the criteria differ from one insurer to another.

Next, all payments made for the contract must come from an NRE (non-residential external) account. In addition, the frequency of premium payment must be annual. With these simple criteria, eligibility for 18 percent GST rebate will be applicable and will directly translate into higher savings for the policyholder, especially in the long term.

Prerequisites and documentation

Apart from the payment part, you also need to follow the required documentation process to avail the benefit. Although the exact requirements may differ between insurers, the KYC (Know Your Customer) document is a universal requirement. This validates the legitimacy of the insured and is consistent between providers. If required by your insurer, you may also be required to present your PAN card, proof of international address, tax residency certificate, passport and a recent photograph. To prove your international address, you can use utility bills, bank statements, or an ID card or government certificate.

You must have resided in a foreign country for more than 182 days to be eligible for reimbursement. You will also need to produce your NRE bank account statement attesting to the payment of premiums. After verification of documents, the policy is issued and the GST refund process is initiated. Refunds typically take 15 days to process after policy is issued.

Why act now?

In recent years, there has been a significant trend of NRIs returning to India for various reasons, such as career opportunities, family considerations and a desire to reconnect with their roots. In fact, several reports indicate that NRIs are considering returning to India to spend their retirement years, especially in countries like the UK, Canada and Singapore. As one ages, health problems become more likely, making it difficult to get the best insurance policy at affordable premiums. Purchasing health insurance in a timely manner ensures a safety net for life.

In conclusion, while seeking eligibility for GST refund on health insurance policies, NRI status of the applicant is a common requirement. However, specific criteria regarding policyholders, documentation and other details may differ between insurers. Understanding these criteria is essential for those looking to benefit from the GST refund on their health insurance premiums. Consulting with insurers and following their specific requirements is essential to getting the most out of your investment.

Siddharth Singhal, Business Head, Health Insurance, Policybazaar.com

(DISCLAIMER: The opinions expressed are solely those of the author and ETHealthworld does not necessarily endorse them. ETHealthwold.com shall not be liable for any damage caused to any person/organization directly or indirectly.)