GIFT City life insurance: IIO policies, offshore PPLI and ULIP, compared

By Eldar Edmond Grady, CEO, PPLI.com. Research checked 20 October 2026.हिन्दी में पढ़ें

Indian law as at 20 October 2026, Financial Year 2026-27. Product names are given as the insurers publish them; PPLI.com does not review, rate or recommend any of them. Section numbers follow the Income-tax Act 1961 unless stated.

PPLI.com is a research publisher. It is not an insurer, an insurance intermediary or an investment adviser, it is not registered with IRDAI, IFSCA or SEBI, and it does not solicit or arrange insurance in India or in the IFSC. Nothing on this page is an offer of insurance.

What an IFSC Insurance Office is

GIFT City in Gandhinagar is India’s first International Financial Services Centre, regulated by IFSCA under the IFSCA Act 2019. Under the IFSCA (Registration of Insurance Business) Regulations 2021, an Indian or foreign insurer may register an IFSC Insurance Office, an IIO, and write policies in foreign currency. For Indian tax and exchange-control purposes the IFSC is treated as outside India in some respects and inside in others, which is the source of most of the confusion on this page.

The market has filled quickly. LIC’s IFSC office markets a USD plan called Wealth Builder Plus. HDFC Life International, the GIFT City branch of HDFC International Life and Re, sells savings, health and retirement products in dollars to NRIs. Tata AIA opened an offshore branch in September 2024 with a USD term plan, Life Protect Supreme, and planned unit-linked products. IndiaFirst Life has a ULIP called Wealth Wise from GIFT City. Policybazaar began offering dollar term plans from partner insurers in July 2026, and Ageas Federal Life launched a multi-currency plan in October 2026. BDO reported in 2025 that Canara HSBC Life, Star Union Dai-ichi and others were registered but without products yet. Every one of these is an insurer’s product with the insurer’s own fund menu, sold to NRIs and foreign nationals first.

What the Finance Act 2025 settled: no premium ceiling

Since 2021 and 2023, section 10(10D) has denied the exemption on maturity or surrender where annual premium exceeds ₹2.5 lakh for a ULIP or ₹5 lakh for other policies. The Finance Act 2025 added IIO policies to the exceptions. The memorandum explaining the Finance Bill 2025 says the clause was amended so that proceeds received on a life policy issued by an IFSC insurance intermediary office are exempt without the condition relating to maximum premium, with effect from 1 April 2025, in order to provide parity to non-residents availing life insurance from the IFSC vis-a-vis other foreign jurisdictions. The other conditions of section 10(10D), including the 10% premium-to-sum-assured test, still apply, and the equivalent provision in the Income-tax Act 2025 should be checked for a policy bought now.

For an NRI that is clean: a dollar policy from GIFT City carries a maturity exemption that a Singapore policy of the same size does not. The memorandum’s own words are the limit of the clarity, though. IndiaFirst Life’s GIFT City head pointed out, as BDO reported, that the memorandum mentions only non-residents. Whether a resident who lawfully holds an IIO policy gets the same exemption is a reading of the section, not a stated policy.

Can a resident buy it? The question that is still open

Three documents point one way. The RBI’s circular of 10 July 2024 allowed resident individuals to remit under LRS to the IFSC for all permissible purposes under the scheme, including financial services and products under the IFSCA Act 2019. IFSCA’s official presentation of September 2025 states that resident Indians may take life and health insurance from IIOs under LRS. LIC’s IFSC page lists resident Indians through LRS among its customers.

One document points the other way, and it is the one with legal force. Regulation 4 of the FEMA (Insurance) Regulations, 2015 requires the RBI’s specific or general permission for a resident to take a life policy from an insurer outside India, and the LRS Master Direction operates within the permissible purposes of LRS, which do not list life premium. We have found no RBI circular and no amendment to the Insurance Regulations that removes the regulation 4 requirement for IIO policies. Cyril Amarchand Mangaldas wrote in November 2024 that if the RBI intends to let residents buy dollar life policies from the IFSC without prior approval, a clarification and an amendment to the FEMA regulations are necessary. IFSCA’s 2025 statement points in that direction; it is not an RBI instrument.

So we call it a possibility, not a route. If you are a resident and an adviser tells you to remit the premium, ask three things in writing: under which purpose code the bank will book the remittance, which document gives the regulation 4 permission or removes the need for it, and who bears the consequence if the RBI later takes a different view. The background is on FEMA, LRS and foreign life insurance.

IIO policy, offshore PPLI and ULIP side by side

The presentations use the same phrase for all three: investing inside insurance. The structures are not the same. An IIO policy is an insurer’s product with the insurer’s fund menu, in dollars, with a tax exemption on maturity. An offshore PPLI is a contract built around a separately managed account that the family’s own manager runs, usually from USD 2 million upward, with no Indian exemption on surrender but deferral and an exempt death benefit. A ULIP is the rupee retail product. Which one fits depends on how much money, which currency the family spends in, and whether the family wants the insurer’s funds or its own manager.

The fuller comparison, with the ULIP arithmetic and the PPLI deferral figures, is on PPLI vs ULIP.

A dollar policy means planning in dollars

Over the last three decades the rupee has lost about 3% a year against the dollar, which is the figure Policybazaar used to explain its dollar term plans: a ₹2 crore cover worth about USD 5,50,000 in 1996 is worth about USD 2,00,000 today. If the children will study abroad, or the family keeps a home in Dubai, a dollar benefit matches the expense. If the family’s life is in rupees, the rupee value of a dollar policy rises and falls with the exchange rate, and Business Standard reported in January 2026 that some NRIs with India-based liabilities were moving back towards rupee term plans for that reason. Ask for the projection in both currencies, and ask what happens to the death benefit if the rupee strengthens.

Eight things to have in writing before paying a GIFT City premium

• The IIO’s IFSCA registration number and the legal entity that will issue the policy.
• Your residential status under FEMA and under the Income-tax Act in the year of purchase, from a CA, in writing.
• If you are resident: the purpose code the bank will use, and the document that gives the regulation 4 permission or removes the need for it.
• The governing law of the policy and the forum for a dispute; whether Indian nomination rules under section 39 of the Insurance Act 1938 apply to it.
• The full charge schedule for five, ten and twenty years, including surrender charges and fund management charges.
• The tax computation on maturity and on surrender under section 10(10D) as amended by the Finance Act 2025, with the 2025 Act section number.
• Whether the policy goes in Schedule FA, and what the insurer reports under CRS or FATCA.
• Who receives the money on death, in which currency, through which account, and with which documents.

If any of the eight comes back as a verbal assurance, the proposal is not ready.

Sources and authorities

• IFSCA (Registration of Insurance Business) Regulations 2021; IFSCA insurance presentation, September 2025.
• Memorandum explaining the provisions of the Finance Bill, 2025: IFSC insurance intermediary office policies and section 10(10D).
• FEMA 12(R)/2015-RB, regulation 4; RBI Master Direction, LRS; RBI circular of 10 July 2024 on remittances to the IFSC; Cyril Amarchand Mangaldas, November 2024 (secondary).
• LIC IFSC branch office; BDO India, 2025: GIFT City insurance tax-free for NRIs, what about residents (secondary).
• Business Standard: HDFC Life International from GIFT City; Business Standard, 2 September 2024: Tata AIA dollar policies; Business Today, 27 July 2026: Policybazaar dollar term plans; Business Standard, 1 January 2026: rupee swings and NRI term cover (press).