By, New Delhi
Feb 15, 2024 12:53 PM IST
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It is essential for every Indian student to be familiar with the fundamentals of insurance, banking, and taxes in their chosen study-abroad location.
When contemplating international education, the selection of suitable travel and health insurance holds significant importance. Research published in the International Journal of Travel Medicine and Global Health reveals that 15-20% of students encounter health issues while pursuing studies overseas.
Understanding banking options is equally crucial when choosing appropriate insurance. A survey conducted by the Institute of International Education found that 34% of students faced challenges with foreign banking systems, underscoring the necessity of prior investigation into local banking norms, associated fees, and international transaction regulations.
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In an insightful interview, Raghwa Gopal, CEO of M Square Media (MSM) Group, elaborates on the essential aspects of insurance, banking, and taxes that every Indian student should grasp before embarking on higher studies abroad.
Is insurance obligatory for all study-abroad destinations?
Insurance prerequisites for international studies vary across countries. A report from International Student Insurance indicates that over 75% of educational institutions in popular destinations such as the US, UK, and Australia mandate health insurance for international students.
Indian students have the option to either purchase insurance before departure—chosen by approximately 60%, as per Bajaj Allianz—or obtain it upon arrival in compliance with local regulations. Research is crucial, as highlighted in a study by the National Institute of Health, showing that non-compliance with local insurance requirements affects 30% of students.
What is the average insurance coverage required and what does it encompass?
The average insurance coverage varies depending on the destination and the extent of services provided. For instance, in the United States, the annual health insurance cost for international students ranges from \(1,500 to \)2,500, as reported by the International Education Financial Aid organisation.
This coverage typically includes medical expenses such as doctor’s visits, hospital stays, emergency services, and prescribed medications. In countries like Germany and Australia, the average annual cost is lower, around \(500 to \)800, partly due to healthcare subsidies in these nations.
What are the key dos and don’ts when selecting an insurance provider?
Dos:
• Conduct thorough research: Compare coverage and costs offered by multiple providers.
• Understand the coverage details: Ensure essential medical services, including emergencies and mental health, are covered, along with any specific health requirements.
• Verify compliance: Confirm that the plan meets the legal requirements of both the destination country and the educational institution.
• Familiarize with the claim process: Know how to file claims and the reimbursement timeline.
Don’ts:
• Overlook the fine print: Pay attention to exclusions and limitations in the policy.
• Base decision solely on price: Cheaper options may lack adequate coverage.
• Neglect network hospitals: Ensure access to in-network medical facilities near your study location.
• Delay purchase: Some countries require proof of insurance for visa processing, so avoid last-minute arrangements.
Name the top 5 insurance providers for students pursuing higher studies abroad.
The top 5 insurance providers offering comprehensive services in India are:
HDFC Ergo, ICICI Lombard General Insurance Co. Ltd, Bajaj Allianz General Insurance (known for the ‘Student Companion Plan’), Reliance General Insurance, and TATA AIG General Insurance Company Limited.
What are the crucial details a student should be aware of before opening a bank account in a foreign country?
Research local banking requirements: As per a survey by HSBC, about 70% of international students must provide specific documents like a student visa, university enrollment letter, and proof of address to open a bank account.
Understand the fee structure: The Global Student Mobility 2021 report indicates that around 40% of international students encounter unexpected banking charges. Be aware of maintenance fees, transaction costs, and international transfer fees.
Explore international student services: Some banks offer tailored services for international students, which, according to a report by Education International, 50% of students find advantageous, such as multi-currency accounts or reduced fees.
Inquire about overdraft facilities: Understanding overdraft terms is crucial, as reported by the International Education Financial Aid organisation, indicating that 30% of international students face budget management challenges.
Are there restrictions on remittances from India to a foreign bank account?
Under the Reserve Bank of India’s (RBI) Liberalised Remittance Scheme (LRS), Indian students can remit up to $250,000 per financial year to a foreign bank account for educational expenses, including tuition, living costs, and other expenditures. Note that for amounts exceeding INR 7 lakh in a fiscal year, a Tax Collected at Source (TCS) certificate is mandatory. It is advisable to refer to the latest RBI guidelines for updated information, as regulations are subject to change.
What are the essential tax considerations for students?
Students planning to study abroad or currently studying overseas should be aware of the following tax basics:
Income tax: If you earn income in your study destination, such as from part-time work or internships, you may be liable to pay local taxes. Understand the tax-free income threshold and filing obligations in that country.
Double taxation: India has Double Taxation Avoidance Agreements (DTAAs) with several countries, allowing relief or credits for taxes paid in one country against the other. Familiarize yourself with these agreements to prevent double taxation.
Reporting global income: Indian residents for tax purposes must declare their global income in India, including earnings from abroad.
Tax benefits on education loans: Individuals with education loans from India may qualify for tax benefits under Section 80E of the Income Tax Act on the interest paid.
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