Rupee swings push NRIs to rupee-linked term insurance: Experts explain

'Currency swings are reshaping protection choices,' as experts say NRIs increasingly prefer rupee-linked term plans for India-based liabilities

Rupee breached the 90-mark against the US dollar recently, bringing currency volatility under the spotlight for Indians earning abroad. For non-resident Indians (NRIs), this has also brought to the fore a long-standing question in financial planning: Should life insurance cover be linked to foreign currency income, or anchored in India’s rupee-based liabilities?

 

Industry experts try to decipher it. While dollar-denominated protection remains relevant for globally mobile earners, demand for rupee-denominated term insurance is rising, driven by practical family needs and long-term affordability.

 

Why rupee cover is finding favour

Despite earning in foreign currency, most NRIs continue to have financial responsibilities in India. These include supporting parents, servicing home loans, funding children’s education, and managing household expenses. A rupee-denominated term plan directly aligns insurance payouts with these obligations.

 

 

“NRIs are increasingly looking to secure long-term financial continuity for families back home,” says Rajesh Krishnan, chief of operations and customer experience at Bajaj Life Insurance.

 

He notes that Bajaj Life has seen strong interest in rupee-denominated term plans that offer high sum assured options, flexible payouts, and riders covering critical illness, disability, and income protection.

 

Rupee plans also reduce the risk of mismatch between claim payouts and actual expenses in India, especially when exchange rates fluctuate sharply.

 

Younger buyers, longer commitments

Insurers are also seeing a clear demographic shift. According to a recent PolicyBazaar analysis cited by Tata AIA Life Insurance, nearly 62 per cent of NRI term buyers are now under the age of 40. These customers are opting for longer policy tenures of 35–40 years, locking in premiums early and planning protection well ahead of major life events.

 

“Younger NRIs are increasingly focused on securing protection early, keeping family obligations in India in mind, including parents’ health and well-being,” says Shruti Oke, senior vice president and head of product at Tata AIA Life Insurance.

 

Cultural touchpoints such as festivals or family visits to India often prompt NRIs to reassess long-term responsibilities, she adds.

 

Dollar plans still have a role

While rupee-denominated plans are gaining ground, insurers stress that dollar-based cover remains relevant for certain profiles. Tata AIA, for instance, offers both rupee- and dollar-denominated term plans, including policies issued through its offshore branch at GIFT City IFSC.

 

USD-denominated plans are designed for NRIs with dollar-linked income and global assets, helping minimise currency risk where expenses or financial goals are overseas.

 

“The idea is to align protection with income streams and asset allocation,” Oke explains.

 

What insurers are investing in next

Over the next three to five years, insurers expect NRI demand to grow steadily, supported by younger buyers, longer tenures, and trust in India’s regulatory framework.

 

Key focus areas include:

 

-Digital on-boarding, including video medical assessments

 

-Medical test networks across multiple countries

 

-Flexible benefit design and life-stage coverage enhancements

 

-Wellness-linked services for families in India

 

With the rupee remaining volatile and global mobility increasing, experts say NRIs are no longer choosing between rupee and dollar plans blindly. Instead, they are matching currency exposure with real-life financial responsibilities, making rupee-denominated term insurance a practical anchor in uncertain times.