Is It Worth Buying Health Insurance in India from the UK? NRI Pros, Cons, and Tax Benefits Explained

Living in the UK as a Non-Resident Indian (NRI) often means juggling ties to two countries—your life abroad and your roots back home in India. Whether it’s frequent trips to visit family, planning for medical treatments, or ensuring your ageing parents are cared for, healthcare remains a top priority. But here’s a question many NRIs ask: is it worth buying health insurance in India from the UK? With the rising costs of medical care and the complexities of global healthcare systems, securing Indian health insurance for NRIs can be a smart move—but it’s not without its nuances.

Why Consider Health Insurance in India?

For NRIs living in the UK, the idea of buying health insurance in India might seem unnecessary at first, especially if you already have coverage through the NHS or private UK insurers. However, Indian health insurance for NRIs offers unique advantages tailored to your connection with India. Medical costs in India are rising rapidly, with medical inflation outpacing general inflation at over 17% annually. A single hospital stay for a critical illness or surgery can easily run into lakhs, eating into your savings if you’re uninsured. For NRIs who travel to India frequently or have family members residing there, having the best health insurance in India ensures peace of mind and financial security.

One key reason to consider health insurance in India is its affordability compared to UK private health insurance plans. While the NHS provides excellent care, it may not cover elective treatments or procedures you might seek in India due to lower costs or familiarity with Indian healthcare providers. Moreover, international health plans often don’t integrate well with Indian hospitals, lacking cashless facilities or coverage for local treatment patterns. Indian health insurance for NRIs bridges this gap, offering comprehensive coverage at a fraction of the cost of UK private plans.

Another compelling factor is the ability to cover family members in India, such as ageing parents or spouses, under a single policy. Indian health insurance for NRIs often includes family floater plans, which provide coverage for multiple family members, ensuring they have access to quality healthcare without the financial burden. This is particularly relevant for NRIs who may not be physically present to manage medical emergencies back home.

The Pros of Buying Health Insurance in India from the UK

1. Cost-Effective Coverage

Health insurance in India is significantly more affordable than private health insurance in the UK. Premiums for comprehensive plans in India are often a fraction of what you’d pay for similar coverage in the UK, making it a cost-effective way to secure healthcare for yourself and your family. For instance, a family floater plan covering hospitalisation, outpatient treatments, and critical illnesses can be secured for a modest annual premium, offering high sum insured options to protect against escalating medical costs.

2. Tailored for Indian Healthcare Needs

Indian health insurance for NRIs is designed with the Indian healthcare system in mind. This means coverage aligns with local medical practices, hospitalisation costs, and treatment protocols. Whether it’s cashless hospitalisation at a network hospital, coverage for AYUSH treatments (Ayurveda, Yoga, Unani, Siddha, and Homeopathy), or pre- and post-hospitalisation expenses, these plans ensure seamless access to care during your visits to India or for your family members residing there.

3. Tax Benefits Under Section 80D

One of the standout advantages of purchasing health insurance in India is the tax benefit under Section 80D of the Indian Income Tax Act. If you have taxable income in India—such as rental income, investments, or a pension—you can claim deductions of up to ₹25,000 per year for premiums paid for yourself, your spouse, and dependent children. If you buy a policy for your parents (under 60), an additional ₹25,000 deduction is available, and if they’re over 60, this limit increases to ₹50,000. For an NRI with elderly parents, this could mean tax savings of up to ₹1,00,000 annually if both you and your parents are covered under a policy. These tax benefits make health insurance in India a financially savvy choice.

4. Coverage for Family Members in India

For NRIs, ensuring the health of ageing parents or other dependents in India is often a priority. Indian health insurance for NRIs allows you to include family members in a single policy, such as a family floater or senior citizen plan. These plans cover hospitalisation, daycare procedures, and even home healthcare services, reducing the stress of managing medical emergencies from afar. The ability to access a wide network of hospitals with cashless treatment options further simplifies the process.

5. Flexibility and Lifetime Renewability

The best health insurance in India offers flexibility, allowing NRIs to purchase policies online from the UK without needing to be physically present in India. Many plans also offer lifetime renewability, ensuring continuous coverage regardless of age or health changes. This is particularly valuable if you plan to return to India permanently in the future, as starting a policy now can help you avoid higher premiums due to age or pre-existing conditions later.

The Cons of Buying Health Insurance in India from the UK

There are various advantages of buying health insurance in India from UK but as we all know that a coin always has two sides. Some of the cons are listed below:

1. Waiting Periods for Pre-Existing Conditions

One downside of Indian health insurance for NRIs is the waiting period for pre-existing conditions, which typically ranges from 2 to 4 years. If you or your family members have conditions like diabetes or hypertension, coverage for these may not kick in immediately, requiring careful planning to ensure uninterrupted protection.

2. Requirement for Indian Bank Account

To purchase health insurance in India, premiums must be paid in Indian rupees through an Indian bank account, such as an NRE, NRO, or FCNR account. For NRIs in the UK, this might mean maintaining an active Indian bank account, which could involve additional paperwork or fees. In some cases, a close relative in India can pay the premium on your behalf, but this adds another layer of coordination.

3. Limited Global Coverage

While some premium Indian health insurance plans offer international emergency assistance, most are designed for treatments within India. If you’re seeking coverage for medical care in the UK or elsewhere, you’ll likely need to maintain a separate international health plan, which could increase your overall costs.

4. Potential for Medical Tests

Depending on your age or medical history, some insurers may require a pre-policy medical check-up. For NRIs in the UK, this could mean arranging tests through an overseas partner facility or travelling to India, adding to the inconvenience or cost. However, many modern insurers offer streamlined processes to minimise this hurdle.

5. Complexity of Claims from Abroad

Filing claims from the UK can be more complex than for residents in India, especially if documentation or follow-ups are required. While digital claim processes have improved, NRIs may still face challenges coordinating with hospitals or insurers across time zones. Choosing a provider with a robust digital platform and responsive customer support is crucial to mitigate this issue.

Tax Benefits: A Closer Look

The tax benefits of Indian health insurance for NRIs are a significant draw, but they come with caveats. As mentioned, Section 80D allows deductions of up to ₹25,000 for yourself and ₹50,000 for senior citizen parents, provided you file income tax returns in India. However, if you don’t have taxable income in India, these benefits won’t apply immediately. For NRIs planning to return to India or those with financial interests like property or investments, starting a policy now can position you to claim these deductions in the future while securing lower premiums.

Additionally, NRIs can claim a GST refund on the 18% Goods and Services Tax included in the premium, provided they’re insured under the policy, pay through an NRE account, and submit documents like a Tax Residency Certificate (TRC) and a six-month NRE bank account statement. This can further reduce the effective cost of health insurance in India.

Is It Worth It?

Deciding whether to buy health insurance in India from the UK depends on your circumstances. If you frequently visit India, have family members residing there, or plan to return permanently, the benefits—affordability, comprehensive coverage, and tax savings—often outweigh the cons. For NRIs with ageing parents, securing the best health insurance in India can provide peace of mind, ensuring your loved ones have access to quality care without financial strain. However, if you rarely visit India or have robust international coverage, the additional policy might not be necessary.

The key is to assess your needs: consider your travel frequency, family health requirements, and financial goals. Look for plans with high claim settlement ratios, extensive hospital networks, and digital claim processes to simplify management from the UK. Policies like those from Niva Bupa, for instance, are tailored for NRIs, offering features like cashless hospitalisation, family floater options, and tax-efficient plans, making them a reliable choice for comprehensive coverage.

Conclusion

Buying health insurance in India from the UK can be a strategic decision for NRIs, offering cost-effective, tailored coverage and valuable tax benefits. While there are challenges, such as waiting periods and the need for an Indian bank account, the advantages of securing your family’s health and financial future often make it worthwhile. Providers like Niva Bupa stand out for their NRI-friendly policies, extensive hospital networks, and seamless digital processes, ensuring you can protect your loved ones with ease, no matter where you are. So, weigh your options, consider your ties to India, and make an informed choice to safeguard your health and wealth.