Bajaj Life Insurance has launched its first product through GIFT City, joining insurers offering life insurance policies linked to international investments and denominated in foreign currencies.
The product, Bajaj Life Global Wealth Builder, allows policyholders to pay premiums and receive benefits in US dollars, with investment options spanning global equities, emerging markets, gold, liquid funds and artificial intelligence-related equities, the company said on October 22.
The launch follows Ageas Federal Life Insurance’s introduction of its Aurum Advantage Plan earlier this month, which offers investment options denominated in US dollars, euros and British pounds alongside life cover.
Other insurers offering investment-linked policies through GIFT City include LIC, ICICI Prudential Life Insurance, Canara HSBC Life Insurance, IndiaFirst Life Insurance and Tata AIA Life Insurance.
How GIFT City insurance policies work
GIFT City, Gujarat International Finance Tec-City, houses India’s International Financial Services Centre (IFSC), where insurance businesses operate under the regulatory framework of the International Financial Services Centres Authority (IFSCA).
Insurers operating through an IFSC Insurance Office can offer policies in freely convertible foreign currencies, subject to applicable regulations. Investment-linked life insurance policies combine life cover with investments in market-linked funds. Their returns depend on the performance of the underlying investments and are not guaranteed.
Unlike conventional policies denominated in rupees, these products allow eligible customers to invest and receive benefits in a foreign currency. This may be relevant for NRIs and others with overseas financial commitments, such as education expenses or retirement needs abroad. However, eligibility, payment routes and policy conditions vary by product.
What should buyers consider?
Foreign-currency policies can help align savings with future expenses in the same currency, but they also carry investment and currency risks. Customers whose income and future expenses are primarily in rupees should consider the cost of converting money and the effect of exchange-rate movements on their eventual returns.
Buyers should also compare premiums, fund management charges, other policy costs, withdrawal conditions, life cover and tax treatment before purchasing a policy. Tax benefits depend on the applicable law and the policyholder’s circumstances.
GIFT City’s retail insurance market is still developing, with insurers expanding beyond traditional insurance offerings to include products linked to international funds. The suitability of these policies depends on a customer’s currency needs, investment horizon, risk tolerance and requirement for life cover.
NOTE TO READERS
Disclaimer: This article is for informational purposes only and should not be construed as investment advice. Readers should consult certified experts before making any investment decisions.