Term Insurance for NRI in Saudi Arabia

Who is considered an NRI under Indian Insurance Rules?

A Non-Resident Indian (NRI) is an Indian citizen who is staying outside India for employment, business, or other purposes, as per the regulations laid down by the Foreign Exchange Management Act, 1999.

As per the Income Tax regulations of India, an individual is considered an NRI if they are outside India for more than 182 days during the relevant tax year3. This applies to people staying in Saudi Arabia as well.

It is necessary to distinguish NRIs from OCI (Overseas Citizen of India) or PIO (Person of Indian Origin) cardholders. While NRIs are citizens of India staying out of the country, OCI or PIO cardholders are foreign citizens of Indian origin. This is an important factor to consider when applying for a term plan for NRIs. Declaring their status correctly is necessary.

How Saudi-Based NRIs Can Buy Term Insurance from India?

NRIs in Saudi Arabia can buy Indian term insurance remotely. Most insurers offer a fully digital, convenient process for securing coverage from abroad.

So, the following are the steps to buy term insurance by NRIs in Saudi Arabia:

1. Confirm Eligibility and Select a Plan

NRIs in Saudi Arabia are eligible for Indian term insurance. Select a plan that matches your financial needs, such as covering liabilities or ensuring your family’s future.

2. Apply Through a Remote Online Process

Complete your application entirely online. Leading insurers offer paperless onboarding, allowing you to submit your details securely from anywhere in Saudi Arabia.

3. Submit Required Documents Digitally

Submit your passport, Iqama (residency permit), and income proof via the insurer’s portal.

4. Complete Medical Requirements

Depending on coverage, insurers may conduct tele-medical or video assessments. Some applicants may need a physical test at authorised centres in Riyadh or Jeddah.

5. Policy Issuance and Premium Payment in INR

Once approved, the policy and premiums are paid in INR via NRE/NRO accounts. Payouts to beneficiaries are also in INR.

6. Follow Country-Specific Requirements

Insurers maintain specific underwriting for Saudi-based NRIs. You must fully disclose your residency status and comply with FEMA regulations to ensure smooth policy issuance and claims processing.

This streamlined process ensures that NRIs in Saudi Arabia can easily access term insurance in India while meeting all regulatory and insurer-specific requirements.

Benefits of Buying Term Insurance for NRIs in Saudi Arabia

Choosing an Indian term plan for NRIs offers distinct financial and operational advantages for those working in Saudi Arabia. Let us look at a few term insurance benefits for NRIs for better understanding:

• Cost-Effective Premiums for Saudi Residents

The premiums for term insurance for NRIs in India are generally lower than those for international plans available in GCC countries. In fact, recent industry insights suggest that NRI term insurance plans in India can be 20–50% more affordable compared to similar policies abroad4. For example^{^}, a 30-year-old non-smoker can purchase a ₹1 crore term insurance plan for a few thousand rupees only. This makes it a cost-effective long-term option, especially when compared to life insurance available in Saudi Arabia.

• Securing the Family’s Future in India

Term insurance acts as a safety net for your nominees in India. If you pass away, your family's financial security is assured, and they can spend on their daily needs, children’s education, or marriage without compromising their savings. For instance, if your term insurance cover is ₹75 lakh, your family can use ₹25 lakh for immediate needs and invest the remaining ₹50 lakh to generate a regular income for long-term financial stability.

• Payout in Indian Rupees for Indian Liabilities

Payout in Indian Rupees is highly beneficial for NRIs with India-centric liabilities, such as home loan EMIs. Receiving benefits in INR eliminates currency fluctuation risks and ensures financial stability for families. This becomes even more relevant, according to The Hindu, which reported that, as per the Reserve Bank of India March 2025 Bulletin, record remittances of $118.7 billion in FY 2023–24, with 38% coming from the GCC region2, underscoring strong financial ties to India.

• Trusted HDFC Life Insurance Coverage

HDFC Life is a regulated insurance company with a strong claim settlement record. It supports Saudi-based NRIs with cross-border insurance processes, ensuring transparent policy management and assistance for families when needed.

What Saudi NRIs Need to Qualify for Term Insurance?

To apply for term insurance for NRI in Saudi Arabia, you must meet certain eligibility criteria set by the insurer and regulatory guidelines. These requirements help assess your financial stability, health profile, and overall risk.

So the following are the key eligibility criteria to buy a term life insurance for NRI residing in Saudi Arabia:

• NRI/OCI/PIO Status

You must qualify as a Non-Resident Indian (NRI), Overseas Citizen of India (OCI), or Person of Indian Origin (PIO) to apply.

• Age Limits

Most term insurance plan accept applicants aged 18 to 65, depending on the specific plan and variant selected, the maximum entry age can extend upto 85 years with coverage term offering protection up to 85 or 99 years.

• Income Requirements

Your financial eligibility depends on a stable income earned in Saudi Arabia or India.

• Typically, a minimum annual income of ₹5–10 lakhs is required

• Proof includes salary slips or bank statements (last 6 months)

• Health and Lifestyle Factors

You must disclose details such as:

• Smoking or tobacco consumption

• Pre-existing illnesses or critical conditions

• General health status

• Applicants with good health and non-smoking habits may qualify for lower premiums (standard rates).

• Country-Specific Underwriting

Insurers assess the risk based on your country of residence.

• Saudi Arabia is generally considered a low-risk location

• No major restrictions for residents in cities like Riyadh or Dammam

• Occupation Details

You must clearly declare your job profile.

• High-risk occupations (e.g., construction, oil rigs) may require additional checks.

• Accurate disclosure ensures smooth claim settlement

Meeting these criteria helps ensure that your policy is approved smoothly and your family’s financial future remains secure without complications during claims.

Premium Payment Options for Saudi NRIs

It is easy to manage a term insurance policy for NRIs in Saudi Arabia, with multiple flexible payment options. Saudi-based NRIs can pay their premium to an Indian bank account via an international transfer or an automatic payment system.

1. Using NRE/NRO Accounts from Saudi Arabia

For Saudi NRIs, it is very easy to pay premiums through their Non-Resident External (NRE) or Non-Resident Ordinary (NRO) accounts in India.

Payment is made in Indian Rupees (INR), which helps avoid currency conversion when paying premiums, making it easier to continue the policy.

To make this possible, the policyholder must link his bank account to the insurance company and complete a basic verification process. It is always recommended to opt for an NRE account to facilitate future fund repatriation.

2. Paying via Bank Transfer from Saudi Arabia

NRIs can also pay their premiums via international bank transfers originating in Saudi Arabia.

In this mode, the premium payment is transferred from a Saudi Arabian bank account and then converted to Indian Rupees before it is credited to the insurer’s account. The time required to process this transaction may vary by bank, but it generally takes a few working days.

In some cases, banks may also require NRIs to provide additional information, such as SWIFT codes, remittance purposes, etc., before approving the transaction. Accurate information is required while making these payments to avoid any delays in premium allocation or policy renewal.

3. Online Auto-Debit & Renewal Convenience

For hassle-free payments, Saudi NRIs can set up auto-debit or standing instructions from their NRE/NRO accounts.

This ensures that premiums are paid automatically on due dates, reducing the risk of missed payments and policy lapse. It is particularly useful for individuals with busy schedules or those managing finances across countries.

HDFC Life offers easy-to-use online tools for setting up auto-debit, tracking payments, and receiving timely reminders. This helps maintain continuous coverage and supports long-term financial stability without manual intervention.

Trust & Support

HDFC Life provides dedicated support for NRI claims, including assistance with documentation, attestation, and process guidance.

Top insurers in India consistently achieve claim settlement ratios above 98%, strengthening trust and reliability for families in both India and Saudi Arabia.

This consistent claim settlement performance is further reflected in rising adoption among NRIs. Term insurance plans for NRIs are typically 20–30% more cost-effective than GCC-local alternatives. Notably, policy purchases among Saudi-based NRIs have crossed 1.2 lakh, reflecting a 15% year-on-year growth⁶.

Tax Benefits for Saudi NRIs Buying Term Insurance

Saudi-based NRIs can avail of important tax benefits in India when they purchase a term insurance policy in Saudi Arabia, especially if they continue to have taxable income in India. These benefits help reduce tax liability while ensuring financial protection for the family, these become relevant in cases where the NRI earns income from sources such as house property, bank interest, capital gains, or other investments in India. Moreover, as of September 2025, the GST on term insurance has been reduced to Nil (0%), thereby reducing the overall premium outflow.

So, the following are the key tax benefits for Saudi NRIs:

• Deduction Under Section 123 of the Income Tax Act, 2025 (Section 80C of the Income Tax Act, 1961)

Premiums paid towards a term plan for NRI are eligible for a tax deduction of up to ₹1.5 lakh per tax year under the Income Tax Act, 2025, only if opted for Old Tax Regime, the said deduction is not available under the New Tax Regime. This is beneficial for NRIs earning income in India, such as rent or investment returns.

For the Saudi-based NRIs, the deduction is available only against taxable income in India. Accordingly, where an NRI has no taxable income in India, the deduction may not offer any immediate tax benefit.

• Tax-Free Payout Under Section 11 read with Schedule II of the Income Tax Act, 2025 (Section 10(10D) of the Income Tax Act, 1961)

As per this section, the payout amount received in India by NRI under a life insurance policy is exempt from tax in India subject to the prescribed conditions under the Income Tax Act, 2025, also the death benefit received by nominees is generally completely tax-free in India. This ensures that the full sum assured is available to support the family’s financial future.

This benefit assumes particular relevance for Saudi-based NRIs, as the tax exemption in India applies even where the policyholder is non-resident, provided the policy satisfies the applicable statutory conditions.

Additionally, under the latest reforms vide Master Circular on Health Insurance Business dated 29.05.2024 by the Insurance Regulatory and Development Authority of India in 2024, the moratorium period has been reduced from 8 years to 5 years (60 months)⁵. This means that after five years from policy issuance, insurers cannot reject claims on the grounds of non-disclosure, offering greater certainty and security to policyholders and their families.

• Applicability for Saudi-Based NRIs

These tax benefits apply to policies issued by Indian insurers, such as HDFC Life, regardless of the policyholder's residence in Saudi Arabia.

However, the practical availability of such benefits would depend upon the existence of income chargeable to tax in India and fulfilment of the prescribed statutory conditions. Accordingly, Saudi-based NRIs holding policies issued by Indian insurers may avail the relevant tax deductions and exemptions in India, subject to compliance with the applicable provisions of law.

• Double Taxation Avoidance Agreement (DTAA)

India and Saudi Arabia have a DTAA in place that prevents NRIs from being taxed twice on the same income in both countries. The Convention applies to persons who are residents of one or both of the Contracting States.

The DTAA becomes relevant where a Saudi-based NRI derives income from India that may also be liable to tax in Saudi Arabia. In such cases, ‘Article 23 of the India–Saudi Arabia DTAA’ provides the mechanism for elimination of double taxation by allowing credit, subject to the terms of the Convention and domestic tax law limitations.

Accordingly, while tax benefits in relation to a term insurance policy are primarily governed by the Income-tax Act, 2025, the applicability of relief under the India–Saudi Arabia DTAA may need to be examined in cases involving Indian-source taxable income.

• Consult a Tax Advisor

According to the Income Tax Department of India, tax rules may vary depending on individual circumstances. It is advisable to consult a professional tax expert to understand and maximise applicable benefits.

Important Considerations before Buying Term Insurance for NRI in Saudi Arabia

To choose a term plan for NRIs, one needs to adopt a strategy that makes the coverage relevant to both countries. Before selecting a term plan, Saudi-based NRIs need to assess critical factors to ensure the coverage is relevant to their family’s financial security in India.

• Choosing the Right Sum Assured

The sum assured should be sufficient to cover all Indian obligations and goals. As per widely used industry thumb rules and financial planning guidance, individuals typically consider a life cover of around 10–15 times their annual income as a starting point⁶. As a Saudi NRI, this would include any outstanding housing loans in India, living expenses for parents back in India, and goals like funding a child’s education in India in the future.

HDFC Life offers a term insurance calculator and a range of plans to help you determine how much coverage is required to meet these Indian-specific goals and obligations.

• Policy Term Planning for Retirement & Obligations

Your policy term should be aligned with your retirement age or the time when your dependents become independent. For example, if you wish to return to India at the age of 60, your policy term must be at least until then. While a shorter term will result in lower premium costs, it is not advisable, especially if it means you will not have cover when you need it most.

• Accurate Health & Lifestyle Disclosures

You must make full disclosures about your lifestyle, including your health, smoking, and critical illness. NRIs residing in Saudi Arabia must disclose all aspects of their lifestyle during the application process. This will ensure a smooth claims process. HDFC Life offers guidance to help NRIs with their applications, thereby reducing the risk of rejection later.

• Overseas Claim Assistance & Support

A major concern for Saudi residents is how their nominees will manage a claim from abroad. HDFC Life provides specialized support for overseas claims, assisting with document submission and embassy attestation processes. This dedicated service ensures the payout is transferred efficiently to the nominee’s account, offering a transparent, hassle-free experience during a difficult time.

Summary

Securing term insurance for NRIs in Saudi Arabia is an important step toward long-term financial stability and protection. By choosing a plan from a trusted insurer in India, you can ensure your family is financially secure with adequate coverage, affordable premiums, and potential tax benefits^#, helping them manage future expenses and uncertainties with greater confidence.

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