Postal Life Insurance

 

Introduced in 1884, the Postal Life Insurance (PLI) is one of the oldest life insurance plans in India. Still boasting extremely low and affordable premiums, PLI is known for its high returns. Managed by the Department of Posts under the Government of India, it offers a dependable and cost-effective medium of financial protection through life insurance plans.

Let us now delve deeper, starting with the journey of Postal Life Insurance.

What is Postal Life Insurance?

Back in February 1884, the Queen Empress of India approved the introduction of Postal Life Insurance by the Department of Posts, crafted to benefit the Postal Service workers. Later, the services were extended to staff members of the Telegraph Department in the same year. In 1894, it became the first ever insurance programme that offered coverage to female employees as well.

Starting with a maximum insurance coverage limit of Rs 4000 at inception, today PLI coverage can be opted for a maximum coverage of Rs 50 lakh. Today, PLI is available to all central and state government employees, those working in defence and para-military services, universities, government-aided educational institutes, government banks, local bodies, public sector undertakings, cooperatives, joint ventures of a minimum 10% government/PSU stake and professionals like doctors, engineers, lawyers, chartered accountants and the employees of Bombay Stock Exchange and National Stock Exchange. 

A group insurance policy is also available to the extra-departmental employees of the Department of Posts.

PLI Statistics: A detailed report

So, how has reliance on PLI grown over time? Here’s a glance at available data in the period from FY 2011-2017.

Key Features of Postal Life Insurance Policy

Let us now focus on the best features of the Postal Life Insurance Policy.

• Substantial returns: 

PLI offers the highest bonus rates at the lowest premium, compared to any other insurance provider in India.

• Loans: 

One can pledge the PLI policy as a collateral for loan if a Whole Life Insurance Policy reaches 4 years of policy period or an endowment policy reaches 3 years of maturity.

• Nomination: 

The PLI policy allows the policyholder to have a nominee and change the nomination anytime within the policy term.

• Policy conversion: 

A PLI policy can be converted from Whole Life Assurance to Endowment Assurance or from one type of endowment plan to the other, subject to specified rules.

• Policy Revival: 

A lapsed PLI policy can be revived after:

- 6 consecutive non-payment of premiums for a policy in effect for less than 3 years

- 12 consecutive non-payment of premiums for a policy in effect for more than 3 years

• Policy duplication: 

A duplicate copy of the policy can be obtained in case of misplacement or if the policy gets destroyed in fire, destruction or mutilation.

Benefits of Postal Life Insurance in India

Having a Postal Life Insurance can fetch the following benefits to the policyholder.

• Premiums can be paid in annual, half-yearly or monthly schedule on any working day before the due date.

• Advance premiums paid for 6 months or 12 months can earn you a 1% or 2% discount on the premiums respectively.

• A passbook facility is available to track premium payments or loan EMIs.

• Policy transfers to any circle within India are free.

• Tax benefits are available under section 80C of the Income Tax Act, 1961*.

• A nomination facility is available.

• Claim settlement is quick and hassle-free because of the centralized accounting system.

• Additional services like Assignment, Loan, Paid-up Value options, Conversion and Surrender are available.

Eligibility Criteria of Postal Life Insurance

To be eligible to get a Postal Life Insurance, one has to be an employee of the following:

• Central government

• State government

• Defence Services

• Paramilitary Forces

• Reserve Bank of India (RBI)

• Nationalized Banks

• Financial Institutions

• Employees of scheduled commercial banks

• Local Bodies

• Autonomous Bodies

• Public Sector Undertakings

• Universities

• Government-aided educational institutes

• Educational institutes accredited by recognized bodies like All India Council of Technical Education, National Assessment and Accreditation Council, Medical Council of India, etc.

• On contract by the Central/ State Government, where the contract can be extended

• Extra Departmental Agents in the Department of Posts

• Cooperative societies recognised by the government under the Cooperative Societies Act, such as Credit Cooperative Societies. The State or Central Government, RBI, Nationalised Banks, State Bank of India (SBI), National Bank for Agricultural and Rural Development (NABARD), etc., may provide all or part of the funding here

Types of Postal Life Insurance Plans

PLI Plans are available in 7 different types, offering varied features. Here are the Postal Life Insurance Plan details:

1. Whole Life Insurance (Suraksha):

• Scheme: The nominee, legal heir or assignee gets the sum assured along with an accrued bonus upon the death of the policyholder.

• Entry Age: 19-55 years

• Minimum Sum assured: Rs. 20,000

• Maximum Sum Assured: Rs. 50 lakh

• Policy Conversion: After one year, a policy can be converted to an Endowment Assurance policy before the insured turns 57.

• Loan Facility: Can be opted after four years of completion

• Policy Surrender: Allowed after three years. Five years before completion, the policy will not be eligible for the bonus; a commensurate bonus on the lowered amount assured may be accumulated for a policy assigned to a loan or surrendered.

• Medical Examination: Mandatory

• Premiums Payable: Calculated based on factors like entry and maturity age of the applicant.

2. Endowment Assurance (Santosh):

• Scheme: Upon maturity of the policy, the policyholder gets a sum assured along with an accrued bonus. The death benefit of sum assured and bonus is payable to the assigned, nominee or legal heir if the policyholder dies within the term.

• Entry Age: 19-50 years

• Minimum Sum assured: Rs. 20,000

• Maximum Sum Assured: Rs. 50 lakh

• Policy Conversion: Can be converted to any other Endowment Assurance policy subject to the rules and regulations of PLI.

• Loan Facility: Available after four years of completion

• Policy Surrender: Can be surrendered after three years of completion. No bonus will be available if the policy is assigned or loaned five years before completion. Else a proportionate bonus on the reduced amount assured can be accrued for a policy surrendered or assigned for a loan. 

• Medical Examination: Mandatory

• Premiums Payable: Calculated based on factors like entry and maturity age of the applicant.

3. Convertible Whole Life Insurance (Suvidha):

• Scheme: Upon maturity of the policy, the policyholder gets a sum assured along with an accrued bonus. The death benefit of sum assured and bonus is payable to the assigned, nominee or legal heir if the policyholder dies within the term.

• Entry Age: 19-55 years

• Minimum Sum assured: Rs. 20,000

• Maximum Sum Assured: Rs. 50 lakh

• Policy Conversion: Can be converted to Endowment Assurance after five years, but before the policyholder turns 55. The policy will automatically turn into a Whole Life Insurance by default if conversion is not opted.

• Loan Facility: Available after three years of completion

• Policy Surrender: Can be surrendered after three years of completion. No bonus will be available if the policy is assigned or loaned five years before completion. Else a proportionate bonus on the reduced amount assured can be accrued for a policy surrendered or assigned for a loan. 

• Medical Examination: Mandatory

• Premiums Payable: Calculated based on factors like entry and maturity age of the applicant.

4. Anticipated Endowment Assurance (Sumangal):

This plan is best suited for people seeking periodical returns. 

• Scheme: Money-back policy

• 15 Years Term Policy: 20% of the sum assured is paid at the 6th, 9th and 12th year of the policy and the remaining 40% with assured bonus upon maturity.

• 20 Years Term Policy: 20% of the assured sum is paid in the 8th, 12th and 16th year of the policy, and the remaining 40% with assured bonus upon maturity. 

• Maximum Sum Assured: Rs. 50 lakh

• Death benefit: Full sum assured along with accrued bonus payable to the assignee, nominee or legal heir upon death of the policyholder.

• Medical Examination: Mandatory

• Premiums Payable: Calculated based on factors like entry and maturity age of the applicant.

5. Joint Life Endowment Assurance (Yugal Suraksha):

This joint holder plan requires any spouse to be eligible for PLI policies. 

• Scheme: Both spouses are covered to the extent of the sum assured plus accrued bonus with only one premium.

• Entry Age: 19-55 years

• Minimum Sum assured: Rs. 20,000

• Maximum Sum Assured: Rs. 50 lakh

• Policy Conversion: Can be converted to any other Endowment Assurance policy subject to the rules and regulations of PLI.

• Loan Facility: Available after three years of completion

• Policy Surrender: Possible after three years. Bonus will not be available if the policy is assigned or lent out five years before completion. However, in the case of a loaned out or relinquished policy, a commensurate bonus on the lesser amount insured may be earned.

• Medical Examination: Mandatory

• Premiums Payable: Calculated based on factors like entry and maturity age of the applicant.

6. Scheme for Physically Handicapped Persons:

Any of the above-mentioned plans can be opted by applicants with physical disability, under this scheme. However, premiums payable will vary across the nature and extent of disability determined through the mandatory medical test.

7. Children Policy (Bal Jeevan Bima):

This is a separate policy for the children of policyholders, available for a maximum of two children in a family.

• Main Policyholder Maximum Entry Age: 45 years

• Age Eligibility for children: 5-20 years

• Maximum Sum Assured: The lesser of Rs. 3 lakh or the sum assured of the main policyholder. 

• Loan Facility: Not available

• The premium payable: The main policyholder is responsible for premium payments for the Children's Policy. No premium is payable in the event of his/her death. Afterwards, the sum assured along with the accrued bonus will be paid upon maturity of the policy.

• No mandatory medical examination is required for children.

• Policy bonus: Calculated at the rate applicable to Endowment Policy subject to the POIF Rules applicable at that time.

Postal Life Insurance Bonus Rates

The following table specifies the bonus rates applicable to the categories of Postal Life Insurance policy. 

Postal Life Insurance Customer Guidelines

If you seek to invest in a Postal Life Insurance scheme, keep in mind the following guidelines:

• Use the policy number on the policy document for future references like identification of the policy, and transactions like premium payment, or services.

• Provide accurate contact details like address and phone number and update if needed at the earliest. This is critical especially for claim settlement, as the claim cheque will be sent to the address provided.

• Store the original policy document safely as this would be required for claim settlement. In case of misplacement or damage of the same, a duplicate copy can be obtained on request.

• Pay premiums regularly for the coverage to continue. Non-payment will result in lost coverage and making legitimate claims won’t be possible. The premium needs to be paid in advance, on the 1st day of each calendar month. Late payment will attract a penalty beyond the grace period till the final working day of the month in question.

• You can pay premiums through deductions from your salary upon the consent of the employer. The deductions will be reflected in the salary slip.

• Premiums can be paid by cheque or cash. You can also pay online, by Electronic Clearance System (ECS) or over the counter at post offices etc.

• You can transfer your PLI policy to another Circle within India, following a job posting.

• You can revive a lapsed policy after 6 or 12 months of non-payment of premiums for a policy in operation for less than or more than 3 years respectively. 

• If the discontinued policy is not reinstated during the revival period, you can place a request to the Chief Postmaster General. This requires payment of all pending premiums with interest and submission of a certificate from a medical examiner stating the life assured is in good health and his/her background remains the same.

• You can get a loan against a policy which is in effect for three years or more or has accrued a surrender value of at least Rs. 1000.

• You can contact the officials at PLI over a grievance or an unresolved issue via letters, phone calls or by email to [email protected]

Postal Life Insurance Forms

Following are the PLI proposal forms available online on the Postal Life Insurance website. 

• Child Proposal Form

• Yugal Suraksha Form

• WLA (Whole Life Assurance), CWLA (Convertible Whole Life Assurance), EA (Endowment Assurance) and AEA Form

• RPLI (Rural Postal Life Insurance) Form

• RPLI Medical Form

• Loan Application Form

• Claims Form

• Maturity Claim Form

• Survival Benefit Claim Form

• Form for Revival of Lapsed Policy

• Personal Bond of Indemnity

PLI Citizen’s Charter

The following table illustrates the PLI services and their Turnaround Time (TAT)

Postal Life Insurance Premium Calculator

To figure out how much premium payment is required for a PLI policy plan, one can always rely on the online premium calculator. The calculator tool requires filling up of details like the age and date of birth of the applicant, the type, coverage and tenure of the policy and the required sum assured along with some other necessary details if any. The spouse’s details also need to be submitted to calculate premiums for the Yugal Suraksha Plan. The online tool offers calculations for the sum assured ranging between Rs 10000 to Rs 50 lakh and for policy types Endowment Assurance Plan, Anticipated Endowment Assurance Plan, Whole Life Assurance Plan and Convertible Whole Life Assurance Plan. 

How to buy Postal Life Insurance Plans online?

Postal Life Insurance can be bought online from the official website of the Department of Post (https://pli.indiapost.gov.in/CustomerPortal/Home.action). Here’s how to go about it.

• Click the Quote menu in the drop-down of Purchase a Policy

• Enter a valid phone number, email ID and correct PIN code to generate the quote.

• The name of nearest Head Post Office will Pop up based on the provided PIN code

• Fill in the Proposal Form

• Pay the initial premium through the link provided in the email or the ‘initial payment menu’ in the drop-down of Purchase a Policy

• Upload the relevant documents through the Document upload menu in the drop-down of Purchase a Policy Customer Portal.

• The selected Head Post Office will download the document for further processing

• Policy Bond will be sent to the customer via Registered Post.

FAQs about Postal Life Insurance (PLI)

Q. What is the main difference between Postal Life Insurance and other Insurance?

Postal life insurance is available for Government and related employees while other insurances are available to everyone alike.

Q. Who is eligible to use PLI insurance?

Government employees or those working in sectors connected to the Government are eligible to use PLI insurance.

Q. Do both spouses need to be Government employees to utilize Postal Life insurance?

No, if any one of the spouses is a government employee, the couple can get Postal Life Insurance. 

Q. Is there any limit to the number of child policies in a family?

A maximum of two children in a family can be eligible for the PLI child policy.

Q. Is the medical check-up mandatory for obtaining a medical Postal Life Insurance?

Yes, a medical checkup is mandatory to obtain a medical Postal Life Insurance 

ARN - ED/01/24/8267