P0608 Purpose Code: Life insurance claim settlements (excluding term insurance) received by residents in India

Purpose code P0608 is used when a resident in India receives a settlement from an overseas insurer on a life policy other than term insurance.

What is the P0608 purpose code?

Purpose code P0608 covers money a resident in India receives when a life insurance claim is settled from abroad, on any life policy other than term cover. In practice that means maturity proceeds, survival benefits, or a death claim on a savings-linked policy held with an overseas insurer. Two things in the description narrow it: the exclusion of term insurance, which sends those claims to P0607, and the phrase naming residents in India as the recipients, which no neighbouring code carries. Under RBI FEMA guidelines, this inward payment is classified under Insurance and Pension Services and reported accordingly.

When to use P0608 purpose code?

Use P0608 when a settlement reaches a resident in India on a life policy that is not term insurance, whether that is money paid at maturity, a survival benefit falling due, or a death claim paid to a beneficiary. The policy type is the test: if the cover carries a savings or maturity element it belongs here, and if it is term cover it belongs under the other claims code even though the payment looks identical.

When to use a different code:

• Use P0607 when the claim is on non-life cover or on a term life policy
• Use P0601 when the money is premium being paid on a life policy rather than a claim being settled
• Use the matching S-code when money is being sent abroad rather than received

Who typically uses P0608 purpose code

Residents in India receiving proceeds on life policies held with overseas insurers, including policyholders collecting maturity or survival benefits and beneficiaries receiving a death claim. The description names residents specifically, which makes this a code concerning individuals rather than businesses.

Examples of transactions covered under P0608 purpose code

• Maturity proceeds paid into India on an endowment policy held with an overseas insurer
• Survival benefit falling due on a money-back policy taken out abroad
• Death claim paid to a beneficiary resident in India on a savings-linked life policy
• Surrender value received from a foreign insurer on a life policy with a savings element

When NOT to use P0608 purpose code

• The claim is on non-life cover or on a term life policy (use P0607)
• The money is premium being paid rather than a claim being settled (use P0601 for savings-linked life cover)
• The recipient is not a resident in India, since the description names residents specifically
• Money is being sent abroad rather than received (use the matching S-code)

Documents required for P0608 purpose code

To receive a payment under P0608, keep the following documents ready so your bank can verify the transaction and report it correctly under FEMA.

How is a P0608 Purpose Code declared?

Declaring the code is pretty straightforward. Here's how the payment gets tagged and reported.

1. Confirm the policy type: Establish that the policy carries a savings or maturity element, since term cover takes the other claims code.
2. Make the claim: Submit the claim to the overseas insurer and receive its settlement advice.
3. Receive the payment: The money is remitted to your Indian bank account.
4. Declare the purpose: State the purpose of the inward remittance on your bank's form.
5. Get your FIRA: Once processed, your FIRA is issued as proof and the payment is reported under FEMA.

Common mistakes to avoid while using P0608 purpose code

A few common slips can hold up your payment or cause compliance issues. Here's what to watch for.

1. Using the wrong claims code for a term policy: Applying P0608 to a term life claim because it is life insurance, when term cover is excluded here and belongs under P0607.
2. Coding a claim as premium: Using a premium code because the money involves a life insurer, when this code covers money paid out on a claim rather than money paid in for cover.
3. Code and document mismatch: The code not matching what your policy and settlement advice describe, which flags the payment.
4. Incomplete documents: Missing the policy document or settlement advice, so the bank cannot confirm the policy type and holds funds until provided.
5. Missing PAN or KYC: Incomplete verification stops the bank from releasing the payment.
6. Using an inward code for an outward payment: Applying a receipt code to money being sent out instead of the matching outward code.

How Skydo simplifies inward remittance under P0608 Purpose Code

With a bank, you declare the purpose code on your own for every single payment. With Skydo, you can preselect your code once and every payment gets tagged automatically.

1. Preselect the code once: Set P0608 as your default and Skydo tags every incoming payment for you, so there's no form to fill on each one.
2. No repeat declarations: A bank makes you restate the purpose for every remittance. Skydo does it in the background, the same way each time.
3. Instant, free FIRA: Your remittance proof is generated and stored on every payment, ready for your CA, GST, and audits, with no request and no fee.
4. Zero FX markup: You get the live mid-market rate with a flat, visible fee, instead of a markup hidden inside the bank's rate.
5. Settled in 24 hours: Your payment reaches your Indian bank within a day, fully reported and compliant.