What You Need to Know About Postal Life Insurance Plans
Discover the benefits and features of Postal Life Insurance plans, tailored for various needs and professions
8 min read
October 08, 2024
Aradhana Kaniya
Introduction
Understanding life insurance is crucial for securing your financial future, and Postal Life Insurance (PLI) offers a robust solution tailored to meet diverse needs. Established in 1884, PLI has a rich legacy of providing financial protection to postal service employees and has since expanded its reach to cover individuals from various sectors. This comprehensive guide delves into the key features and advantages of PLI, shedding light on the different plans available. Whether you're a government employee, a professional, or looking for a policy for your children, this blog will help you understand all crucial postal life insurance plan details, ensuring you make informed decisions for you and your family.
What is Postal Life Insurance?
In 1884, under the auspices of the Queen Empress of India, the Department of Posts introduced Postal Life Insurance (PLI), a scheme meticulously crafted to benefit postal service employees. That same year, its coverage was thoughtfully extended to include employees of the Telegraph Department. Notably, in 1894, PLI pioneered the inclusion of women in insurance programs, marking a significant milestone in India's social progress.
Over the years, PLI has significantly expanded its scope, now offering coverage to a diverse range of employees across multiple sectors. In addition to state and central government employees and those in educational institutions, PLI extends its benefits to personnel in defense and paramilitary services, employees of banks, local bodies, and public sector undertakings. Professionals such as lawyers, doctors, engineers, and MBAs are also eligible, along with employees listed under BSE and NSE. Graduates and diploma holders from colleges and universities recognized by central or state governments can likewise benefit from PLI’s comprehensive coverage.
With PLI, you can easily secure life insurance at an affordable premium, offering additional benefits tailored to your employment, making it a more competitive option compared to other life insurance policies in the market.
A group insurance scheme is also available for extra-departmental employees within the Department of Posts.
a) Advantages
Here are the key benefits of PLI plans are as follows:
> Streamlined Claims: Claim settlement is efficient and straightforward due to the centralized accounting system in place.
> Advance Payment Discounts: Receive discounts of 1% when you make advance payments on premiums for 6-month policies and 2% for 12-month policies.
> Free Transfers: Easily transfer your Postal Life Insurance policy to any circle within the country at no additional cost.
> Flexible Payment Options: PLI offers hassle-free premium payment modes, allowing you to pay on a monthly, semi-annual, or annual basis before the due date.
> Tax Benefits: Premiums paid under PLI are eligible for tax deductions under Section 80C of the Income Tax Act.
b) Key Attributes
The Postal Life Insurance (PLI) policy is designed to provide exceptional benefits and flexibility to policyholders. Below are some of its key attributes:
> High Returns: PLI policies offer some of the highest returns for the lowest premiums compared to other life insurance policies in India.
> Multiple Policies: You can hold one or more policies under the Postal Life Insurance (PLI) scheme, with the total sum assured ranging from a minimum of ₹20,000 to a maximum of ₹50 lakhs.
> Easy Tracking: Policyholders can conveniently monitor their premium payments and loans using the passbook facility provided by PLI.
> Nomination Facility: Like any other life insurance policy, the nomination facility is available and can be updated at any time during the policy term.
> Pledge for Loans: PLI policies can be pledged as collateral for loans once a Whole Life Insurance Policy has been in effect for at least 4 years, or if an Endowment Policy has reached a maturity period of 3 years.
> Document Duplication: If the policy documents are lost or destroyed, PLI allows for the duplication of policy papers through the department.
> Policy Conversion: PLI policy offers the flexibility to switch from Whole Life Assurance to Endowment Assurance or between different types of Endowment Plans, following established guidelines.
> Policy Revival: Lapsed policies can be revived at any time during their term, provided that no more than 5 years have passed since the first premium payment. The revival options include:
i) For policies active for less than 3 years, they can be revived after 6 consecutive non-payments of premiums.
ii) For policies in effect for more than 3 years, revival is possible after 12 consecutive non-payments of premiums.
c) Eligibility Criteria
Eligibility for PLI is structured to accommodate a wide range of individuals, including state and central government employees, various professionals, and employees from different public organizations. The following table provides a clear overview of the eligibility criteria for post office life insurance:
Metrics | Information |
| Person Eligible for PLI | To apply for Postal Life Insurance (PLI), an individual must be an employee of one of the following organizations or departments: - Central government - State government - Defence Services & Para Military Forces - Local Bodies - Autonomous Bodies - Nationalized Banks - RBI (Reserve Bank of India) - Schedule Commercial Banks - Public Sector Undertakings - Universities - Government aided Universities - Department of Posts - Professionals such as Doctors, Lawyers, Engineers, MBA etc. - Employees listed under NSE & BSE - All Graduates and Diploma holders from a State/Central university/college |
| Eligible Entry Age | > Age Requirement for Children: The eligible age for children is from 5 to 20 years. > Eligibility for Other Plans: For all other plans, individuals must be between 19 and 55 years old. However, in the case of the Children’s Policy (Bal Jeevan Beema), the maximum age limit for parents is set at 45 years.
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| Total Payout | - Whole Life Insurance (Suraksha) - Endowment Assurance (Santosh) - Convertible Whole Life Insurance (Suvidha) - Anticipated Endowment Assurance (Sumangal) - Joint Life Endowment Assurance (Yugal Suraksha) - Scheme for Physically Handicapped Persons - Children Policy (Bal Jeevan Bima)
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Different Plans Offered by Postal Life Insurance
Postal Life Insurance offers seven distinct plans, ranging from comprehensive coverage like Whole Life Insurance to specialised options for children, ensuring a variety of protection for different needs. Here are the seven types of PLI plan details and how they meet diverse needs:
a) Whole Life Insurance Plan (Suraksha):
In Suraksha Postal Life Insurance scheme, the policyholder receives the assured amount along with any accrued bonus either upon reaching the age of 80 or in the event of their passing, where the benefits are passed on to the beneficiary.
Metrics | Lowest | Highest |
| Eligible Entry Age | 19 years | 55 years |
| Total Payout | Rs. 20,000 | Rs. 50 Lakh |
| Policy maturity | The policyholder either reaches the age of 80 or passes away. | |
| Policy Conversion | Can be converted into Endowment insurance plan u up to maximum age of years | |
| Premium payment termination age | The option may be selected at ages 55, 58, or 60 for the insured. | |
| Loan provision | Available after completing 4 years | |
| Surrender | After completing 3 years | |
| Bonus Rate | Rs, 76/- per Rs, 1000 SA/year as on 01.03.2023 | |
b) Convertible Whole Life Insurance Plan (Suvidha):
This plan offers the flexibility to switch to an Endowment Assurance plan after completing five years. Should the policyholder pass away, the nominee will receive the assured sum along with any accrued bonuses.
Metrics | Lowest | Highest |
| Eligible Entry Age | 19 years | 55 years |
| Total Payout | Rs. 20,000 | Rs. 50 Lakh |
| Policy Conversion | The policy can be converted into an Endowment Insurance Plan after five years but not beyond six years from the date of purchase. If not converted, it will be treated as a Whole Life Plan. | |
| Loan provision | Available after completing 4 years | |
| Surrender | After completing 3 years | |
| Bonus Rate | Rs, 76/- per Rs, 1000 SA/year as on 01.03.2023 | |
*A bonus for the Endowment Insurance Plan will be provided if the policy is converted.
c) Endowment Assurance Policy (Santosh):
These plans provide coverage for a specific term, allowing the policyholder to receive the sum assured along with the bonus at the time of maturity, which is typically predetermined to fall between the ages of 35 and 60.
Metrics | Lowest | Highest |
| Eligible Entry Age | 19 years | 55 years |
| Total Payout | Rs. 20,000 | Rs. 50 Lakh |
| Policy maturity at Predetermined Age | At the age of- 35 years 40 years 45 years 50 years 55 years 60 years | |
| Surrender | After completing 3 years (no bonus is payable if surrendered before 5 years) | |
| Bonus Rate | Rs, 52/- per Rs, 1000 SA/year as on 01.03.2023 | |
d) Anticipated Endowment Assurance Plan (Sumangal):
For those seeking periodic returns, the Sumangal policy is an ideal choice. It functions as a money-back plan, offering coverage up to ₹50 lakhs, with payouts at regular intervals.
Metrics | Lowest | Highest |
| Eligible Entry Age | 19 years | 40 years - for 20 year term plan 45 years- for 15 year term plan |
| Total Payout | Rs. 20,000 | Rs. 50 Lakh |
| Policy maturity | 15 and 20 years | |
| Benefits to the survival | > 15-Year Term Policy: 20% of the assured amount is paid at the end of the 6th, 9th, and 12th years, with the remaining 40% and guaranteed bonus paid at maturity. >20-Year Term Policy: 20% of the assured sum is disbursed at the end of the 8th, 12th, and 16th years, with the final 40% and guaranteed bonus paid at maturity. | |
| Bonus Rate | Rs, 48/- per Rs, 1000 SA/year as on 01.03.2023 | |
e) Joint Life Endowment Assurance Plan (Yugal Suraksha):
The Joint Life Endowment Assurance plan allows both spouses to be insured under a single policy. With this plan, both individuals are covered for the full sum assured and any accrued bonuses, while only a single premium is required to maintain the policy.
Metrics | Lowest | Highest |
| Eligible Entry Age (for both the spouses) | 21 years | 45 years |
| Total Payout | Rs. 20,000 | Rs. 50 Lakh |
| Policy term | 5 years | 20 years |
| Surrender | After completing 3 years | |
| Bonus Rate | Rs, 52/- per Rs, 1000 SA/year as on 01.03.2023 | |
f) Scheme for Physically Handicapped Persons:
All these above mentioned plans can be availed by individuals with physical disabilities under this special scheme. The premiums for such individuals are adjusted based on the extent and nature of their condition, which is confirmed after a medical test.
g) Children Policy Plan (Bal Jeevan Bima):
the Bal Jeevan Bima plan is designed for the children of PLI policyholders. It offers coverage for up to two children per family, ensuring financial protection for the younger generation.
Metrics | Lowest | Highest |
| Eligible Entry Age of children | 5 years | 20 years |
Eligible Entry Age of parent (policyholder) | - | 45 years |
| Total Payout | Rs. 20,000 | Rs. 3 lakh or equivalent to the Sa of the parent |
| Med Checkup | It is not necessary for the children | |
| Loan provision | NA | |
| Surrender | NA | |
| Bonus Rate | Rs, 52/- per Rs, 1000 SA/year as on 01.03.2023 | |
Final thoughts
In summary, Postal Life Insurance offers a diverse range of plans designed to meet the varying needs of individuals and families, ensuring financial security at every stage of life. With its rich history and commitment to inclusivity, PLI stands out as a viable option for those seeking reliable life insurance coverage. As you consider your insurance needs, it's essential to also think about protecting your health too. Visit OneAssure for comprehensive insights on health insurance options that complement your life insurance plan with unbiased suggestions tailored to your needs. Explore our blogs to stay informed and make empowered choices for your financial well-being.