If you work in the UK and your family lives in India, the most reliable protection is usually a rupee term insurance policy from an Indian insurer, sized to your family’s costs in India. UK death-in-service benefits and UK policies pay out in pounds, can take months to reach India and may end when your job does.
What Your Family Would Need
Base the cover on your family’s costs in India rather than your UK salary. As an illustration, say you’re 38 and your children are four and seven. Household spending of ₹70,000 a month until your youngest turns 22, which is 18 years away, comes to about ₹1.5 crore. Add ₹35 lakh for education and a ₹25 lakh home loan, subtract ₹30 lakh of savings, and your family would need roughly ₹1.8 crore.
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This figure ignores inflation, which increases the need, and returns on an invested payout, which reduce it, so treat it as a starting point. A policy term that runs to age 60, which is 22 years in this case, covers both your children’s dependent years and the rest of your working life.
Buying Indian Cover from the UK
Most Indian insurers sell term insurance for NRIs in the UK, subject to underwriting. You’ll usually need your passport, proof of UK immigration status (most people now have an eVisa, shared through a share code), proof of UK address and income, and your PAN or an equivalent declaration.
Premiums are usually paid from an NRE or NRO account. If medical tests are needed, they may be done in the UK or during a visit to India, depending on the insurer. Answer every health, smoking and occupation question accurately, because a future claim depends on it.
How the Money Reaches Your Family
Because NRIs can buy life insurance in India and name a nominee there, an Indian term policy pays rupees straight into the nominee’s Indian bank account. IRDAI rules generally require insurers to settle claims that need no investigation within 15 days of receiving all documents.
A UK policy or death-in-service benefit pays in pounds, usually into a UK account. If the money goes into your estate, your family may first need a UK grant of probate, which often takes months, followed by a transfer and currency conversion before it reaches India. A UK policy written in trust avoids probate, but your family would still have to handle UK paperwork from India.
Why Death-in-Service Isn’t Enough on Its Own
At four times a £60,000 salary, death-in-service would pay £240,000, or about ₹3 crore at the October 14, 2026, rate of roughly ₹126 to the pound. That’s more than the ₹1.8 crore your family needs, so the size of the payout isn’t the issue.
The issue is reliability. The benefit ends when your job ends, and it’s usually paid at the discretion of the pension scheme trustees, so neither the timing nor the recipient is guaranteed. Treat it as a top-up to cover you own yourself.
Naming the Right People
Name your spouse or children as nominees and keep their details up to date. Under Section 39 of the Insurance Act, 1938, a spouse, children or parents named as nominees are generally treated as beneficial nominees. However, courts disagree on whether this overrides other legal heirs, and the Supreme Court hasn’t yet ruled on the amended provision.
For more certainty, a married man can take out a policy under Section 6 of the Married Women’s Property Act, 1874, for the benefit of his wife and children, and a married woman can do the same for her children. The proceeds are held in trust and are generally protected from your creditors, although premiums paid to defraud creditors can be recovered. Such a policy has trustees instead of a nominee, and the beneficiaries can’t be changed once it’s issued.
UK Inheritance Tax
Since April 6, 2025, UK inheritance tax has been based on long-term residence. If you’ve been a UK resident for at least 10 of the previous 20 tax years, your worldwide estate can be subject to it, generally at 40% above the £325,000 nil-rate band. If you arrived more recently, your non-UK assets are outside its scope. A long-term resident who leaves the UK can remain within its scope for up to 10 years.
The spouse exemption is the key issue for a family living in India. A spouse who lives in India isn’t a long-term UK resident, so transfers to them are generally tax-free only up to £325,000, unless they elect to be treated as one. A UK policy written in trust usually stays outside your estate, but ask a UK advisor how an Indian policy would be treated before you buy.
Indian Tax and Keeping the Policy Active
In India, death benefits are tax-free under Section 11 read with Schedule II of the Income-tax Act, 2025, and individual term insurance premiums have carried no GST since September 22, 2025. A premium deduction under Section 123 helps only if you have taxable Indian income and file under the old regime.
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A lapsed policy protects no one. The grace period is generally 15 days for monthly premiums and 30 days for other payment frequencies, so check yours. Your family should also know that a UK death certificate usually needs to be attested or apostilled for a claim in India.
Keeping the Cover Up to Date
Review your cover whenever you change jobs, take on a new loan or your family’s plans to join you in the UK change.
Keep death-in-service as a top-up. Your family’s main protection should be a rupee policy sized to what they need in India and paid to the people you’ve named.