Postal Life Insurance Plans

What is Postal Life Insurance?

Postal Life Insurance Scheme offers Life Insurance cover with high returns on premium. The maximum sum assured offered under this scheme is Rs. 50 Lakhs. This policy is offered by the Government of India, to employees of Central and State Public Sector Enterprises, Central and State Governments, Government Aided Educational Institutions, Universities, Government aided Educational Institutions, Autonomous Bodies, Local Bodies, Cooperative Societies, Joint Ventures having a minimum of 10% Government/ PSU stake, etc.

PLI Statistics – A Detailed Report:

Source: www.postallifeinsurance.gov.in

Features of Postal Life Insurance Policy

By investing in Postal Life Insurance, a policyholder can avail the following benefits:

• Nomination facility: The policyholder can nominate his/her beneficiary, and can also make changes to the nomination.
• Loan facility: Loan facility is available against this policy. The policyholder can pledge his/her policy as a collateral to the Heads of the Region/ Circle on behalf of the President of India, once the policy has attained 3 years maturity in case of an Endowment Assurance policy and 4 years policy period has been completed in the case of a Whole Life Insurance policy. Assignment facility is also available under this scheme.
• Policy Revival: A policyholder can revive a lapsed policy. The policy can be revived when a policy has lapsed under the following conditions –
  • Policy has lapsed after 6 successive non-payment of premium with the policy being in effect for less than 3 years.
  • Policy has lapsed after 12 successive non-payment of premium where policy has been in effect for more than 3 years.
• Duplicate Policy Document: A duplicate policy document will be issued to the policyholder if he/she has lost the original document. This also applies to the case where the original policy document is mutilated, burned or torn and the insured wants a duplicate of the same.
• Conversion of Policy: This policy can be converted from a Whole Life Assurance policy to an Endowment Assurance Policy. An Endowment Assurance Policy can be converted to another Endowment Assurance plan as per the regulations and guidelines laid down by the insurer.

Benefits of Investing in PLI

Some of the other benefits and discounts offered under the Postal Life Insurance scheme are as follows:

• The insured can avail income tax exemption as provided under Sec. 88 of the Income Tax Act.
• The premium payable for the sum assured and coverage is much lower than that payable under any other life insurance policy.
• Additional facilities offered under this policy are – Assignment, Loan, Conversion, Surrender and Paid Up Value options.
• The policy can be transferred to any Circle within India, at no additional charges.
• Passbook facility is available to track the payment of premium and in case of loan transactions, etc.
• Premium can be paid on an annual, half-yearly and monthly basis. When the payment is due, the policyholder can make a payment on any working day.
• If you make an advance premium payment for a policy period of 6 months, you can avail a discount on premium worth 1% of the value.
• If you make an advance premium payment for a policy period of 12 months, you can avail a discount on premium worth 2% of the value.
• Nomination facility is available.
• Since this scheme has a centralized accounting facility, claims process is quick and easy.

Postal Life Insurance Eligibility

Employees of the organizations listed below are eligible to obtain a Postal Life Insurance policy:

• Defense Services
• State Government
• Central Government
• Para-Military forces
• Local Bodies
• Reserve Bank of India
• Government-aided Educational Institutions
• Public Sector Undertakings
• Nationalized Banks
• Financial Institutions
• Autonomous Bodies
• Those appointed in the Central/ State Government on a contract basis, where the contract can be extended.
• Employees of all Scheduled Commercial Banks
• Extra Departmental Agents in Department of Posts
• Those employed in educational institutes that are accredited by recognized bodies such as All India Council of Technical Education, National Assessment and Accreditation Council, Medical Council of India etc.
• Those employed in Credit Co-operative Societies and other Co-operative Societies registered with Government under the Co-operative Societies Act. These can be and partly or fully funded by the State Government, Central Government, RBI, Nationalized Banks, SBI, NABARD, etc.

Advantages of Postal Life Insurance Policies

• PLI schemes have several benefits awarded to their applicants and is one of the most sought out insurance products in the country because of its flexibility:
• Name of nomination can be changed by the insured at any given time.
• Duplicate policy bond can be reissued to the insured, in case the original Policy Bond is burnt, torn, lost or mutilated.
• A lapsed postal insurance policy can be revived after 6 unpaid premiums if it remained in force for less than 3 years. It can also be revived after 12 unpaid premiums if it remained in force for more than 3 years.
• The insured can avail loan by pledging his/her scheme to Heads of the Circle/Region on behalf of President of India, on the condition that the policy is 3 years old in case of Endowment Assurance and 4 years in case of Whole Life Assurance. Assignment facility can also be availed.
• Policy can be assigned to taking a loan to any financial institution.
• It is possible to convert a Whole Life Assurance to Endowment Assurance and from Endowment Assurance to other Endowment Assurance, based on certain conditions and rules.

Types of Postal Life Insurance Schemes

1. Whole Life Insurance (Suraksha):

The whole life insurance scheme from Postal Life Insurance has the following features and requirements:

• Scheme: Assured amount + accrued bonus is paid to nominee, assignee or legal heir after the insured expires.
• Age Eligibility: Minimum:19 years Maximum: 55 years
• Policy Conversion: Policy can be converted to an Endowment Assurance policy after completion of a year and before the insured turns 57 years of age.
• Minimum Sum Assured: Rs. 20,000
• Maximum Sum Assured: Rs. 50 lakhs
• Loan Facility: Available after 4 years of completion
• Policy Surrender: Policy can be surrendered after 3 years of completion. The policyholder will not be eligible for a bonus if assigned or loaned before 5 years of completion, else proportionate bonus on the reduced amount assured can be accrued if the policy is assigned for a loan or surrendered.
• Medical Examination: Mandatory
• Premiums Payable: The premiums are calculated based on factors such as age of maturity and age of entry and hence, variable for the applicant.

2. Endowment Assurance (Santosh):

The endowment assurance scheme from Postal Life Insurance has the following features and requirements:

• Scheme: Assured amount + accrued bonus is paid to proponent when he or she attains the pre-decided age of maturity. The sum amount insured and a bonus is payable to the assigned, nominee or legal heir in case of unprecedented death.
• Age Eligibility: Minimum: 19 years Maximum: 55 years
• Policy Conversion: Policy can be converted to any other Endowment Assurance policy under the rules and regulations of PLI.
• Minimum Sum assured: Rs. 20,000
• Maximum Sum Assured: Rs. 50 lakhs
• Loan Facility: Available after 3 years of completion
• Policy Surrender: Policy can be surrendered after 3 years of completion. Policy will not be eligible for a bonus if assigned or loaned before 5 years of completion else proportionate bonus on the reduced amount assured can be accrued if the policy is assigned for loan or surrendered.
• Medical Examination mandatory
• Premiums Payable: The premiums are calculated based on factors such as age of maturity and age of entry and hence, variable for the applicant.

3. Convertible Whole Life Insurance (Suvidha):

The convertible whole life insurance scheme from Postal Life Insurance has the following features and requirements:

• Scheme: Assured amount + accrued bonus is paid to proponent when he or she attains the pre-decided age of maturity. The sum amount insured and bonus is payable to the assigned, nominee or legal heir in case of unprecedented death.
• Age Eligibility: Minimum:19 years Maximum: 55 years
• Policy Conversion: Policy can be converted to Endowment Assurance after 5 years but must not exceed 55 years. If an option for conversion not used, the policy will automatically turn into a Whole Life Insurance by default.
• Minimum Sum assured: Rs. 20,000
• Maximum Sum Assured: Rs. 50 lakhs
• Loan Facility: Available after 3 years of completion
• Policy Surrender: Policy can be surrendered after 3 years of completion. Policy will not be eligible for a bonus if assigned or loaned before 5 years of completion else proportionate bonus on the reduced amount assured can be accrued if the policy is assigned for loan or surrendered.
• Medical Examination mandatory
• Premiums Payable: The premium amount is calculated on factors that include an age of maturity and age of entry and hence, variable for the applicant.

4. Anticipated Endowment Assurance (Sumangal):

The anticipated endowment assurance scheme from Postal Life Insurance is best suited for people who expect periodical returns, and has the following features and requirements:

• Scheme:
• 15 Years Term Policy: Benefits are paid post 6 years 20% of the assured sum, 9 years 20% of the assured sum, 12 years 20% of the assured sum and 15 years 40% of the assured sum + assured bonus.
• 20 Years Term Policy: Benefits are paid post 8 years 20% of the assured sum, 12 years 20% of the assured sum, 16 years 20% of the assured sum and 20 years 40% of the assured sum + assured bonus
• Maximum Sum Assured: Rs. 50 lakhs
• Such payments, in the event of an unexpected death of the insured, will not be taken into consideration and the full sum assured + accrued bonus is payable to the assignee or legal heir.
• Medical Examination mandatory
• Premiums Payable: The calculation premium are based on factors that include an age of maturity and age of entry and hence, variable for the applicant.

5. Joint Life Endowment Assurance (Yugal Suraksha):

The joint life assurance from Postal Life Insurance requires any one of the spouses to be eligible for PLI policies. The scheme has the following features and requirements:

• Scheme: Both spouses are covered to the extent of sum assured + accrued bonus with only one premium.
• Age Eligibility: Minimum: 19 years Maximum: 55 years
• Policy Conversion: Policy can be converted to any other Endowment Assurance policy under the rules and regulations of PLI.
• Minimum Sum assured: Rs. 20,000
• Maximum Sum Assured: Rs. 1 lakh
• Loan Facility: Available after 3 years of completion
• Policy Surrender: Policy can be surrendered after 3 years of completion. Policy will not be eligible for bonus if assigned or loaned before 5 years of completion else proportionate bonus on the reduced amount assured can be accrued if the policy is assigned for loan or surrendered.
• Medical Examination mandatory
• Premiums Payable: The premium amount is calculated on factors that include age of maturity and age of entry and hence, variable for the applicant.

6. Scheme for Physically Handicapped Person:

Any of the above-mentioned life insurance policies can be availed by physically handicapped applicants, under this scheme. However, premium prices are dependable on the nature and extent of handicap which will be determined through the mandatory medical examination.

7. Children Policy (Bal Jeevan Bima):

There is a separate policy for the children of policyholders which can be taken. Maximum 2 children in a family are eligible for this scheme:

• Main Policyholder Age Eligibility: Maximum: 45 years
• Children Age Eligibility: Minimum: 5 years Maximum: 20 years
• Maximum Sum Assured: Rs. 3 lakhs or equivalent to the sum assured of the main policy holder whichever is less
• Loan Facility: Not available
• No premium is payable, in case death of main policyholder and full sum assured + accrued bonus paid after the completion of the policy term.
• Main policyholder is responsible for payments for the Children Policy.
• No mandatory medical examination required for a child.
• Policy bonus calculated at the rate applicable to Endowment Policy. The POIF Rules applicable at the time shall be applicable to Children Policy.

Postal Life Insurance Scheme Bonus