All about postal life insurance

[ecis2016.org] In this article, know more about postal life insurance

Life insurance has become a vital part of financial planning in the modern-day household. Several financial institutes advise adding life insurance to a personal financial portfolio to secure the future of a loved one during a time of crisis. In today’s time, buying life insurance has become the norm  among middle-class family members; however, very few know its origin story. Did you know the British government introduced the concept of life insurance in India?

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Origin story of life insurance in India

On February 1, 1884, the Secretary of State introduced Postal Life Insurance (PLI) as a welfare scheme to benefit the postal department employees. Additionally, this service expanded to include the Telegraph Department in 1888 and female employees of the P&T department in 1894. After independence, the Postal Life Insurance was broadened to central and state governments, nationalised banks, public sector undertakings, local government bodies, financial institutions, and educational institutions. Surprisingly, the benefits of PLI did not reach rural village populations until March 1995.

Understanding postal life insurance

Similar to other life insurances, the postal life insurance’s task is to protect your family by creating substantial wealth in the long term. This investment comes in handy when you lose a family member early in life. Postal Life Insurance offers various types of life insurance to suit the requirement of families across India. Moreover, the upper limit of the insurance amount is 50,00,000 (50 lakhs) rupees, and the lower limit is 20,000 rupees. See this detailed report of PLI statistics for better understanding:

Performance of PLI/RLI in 2021-2022

Information credit: Indiapost.gov.in

Who can buy PLI insurance?

• Army officers
• Central government
• Local individuals
• Reserve Bank of India
• Government school
• Public Sector Undertaking
• Government bank
• Financial institution
• Employees of scheduled commercial bank

Various types of post life insurances

PLI Whole Life Assurance plan, Suraksha 

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This plan secures people till 80 years by assuring a death benefit before the insurance maturity. Moreover, you will receive the whole insurance amount during the maturity, irrespective of the policy holder’s death. Some crucial features of this policy are:

• You are entitled to procure a loan post the first four years of the policy
• You can bail out your insurance after the first three years of the policy
• You are entitled to receive a bonus due to its participatory nature
• You will receive money during the maturity or after the policy holder’s death
• You will receive a premium if you reach the age of 50, 55 or 60
• Conversion to endowment assurance policy after the first year and before 57 years
• Mandatory medical examination

PLI Endowment Assurance plan, Santosh

Similar to PLI Whole Life Assurance Plan, Suraksha, this plan is paid after maturity or after the death of the policyholder. Some of the crucial features of this policy are:

• You can bail out from this policy after the first three years
• Similarly, you can apply for a loan after holding the policy for three years
• You will receive money during the maturity or after the policy holder’s death
• You can convert this policy into an endowment plan after five years of holding

PLI Convertible Whole Life Assurance plan, Suvidha

As the name suggests, this plan allows the policyholder to convert their insurance plan to an endowment plan. Some of the crucial features of this policy are:

• You can convert your policy after holding it for five years
• It is offered under a participatory plan; you are liable to receive a bonus
• After holding the policy for four years, you can apply for a loan
• You can bail out from this policy after the first three years
• You can’t enjoy the perks of these benefits if your age is above 55

PLI Anticipated Endowment Assurance plan, Sumangal

This plan pays you a certain amount of money for your insurance at a regular interval. Some of the crucial features of this policy are:

• The policy holder’s family is liable to receive the whole amount of money irrespective of the benefits the holder may have received during their lifetime. 
• It is offered under a participatory plan; you are liable to receive profits and bonuses
• You will be paid thrice during the term of the plan. If your tenure is for 15 years, you will receive the benefits during the 6th, 9th, and 12th year of the policy. If your tenure is for 20 years, you will receive the benefits during the 8th, 12th and 16th year of the policy
• Your 20% of the amount will be locked as a survival benefit
• You will receive 40% of your assurance and bonuses during the time of maturity

PLI Joint Life assurance plan, Yugal Suraksha

Under this policy, you can add two people to one life insurance. Some of the crucial features of this policy are:

• This is curated for a married couple 
• One of the spouses needs to meet the eligibility criteria to buy this insurance
• It is offered under a participatory plan; you are liable to receive bonuses
• You can apply for a loan after holding the policy for three years
• If one of the members dies, you are entitled to service the whole amount with accrued bonuses
•  You will receive a discount of Rs 1 per Rs 10,000 if you choose the insurance coverage above or equivalent to 40,000 rupees
• You can convert your insurance plan to a suitable endowment plan
• You need to have a medical check-up if your assurance amount is higher or equivalent to 1 lakh rupees
• You are not liable to receive any bonuses if you bail out before 5 years

PLI Children Life plan, Bal Jeevan Bima

This insurance is curated specifically for children. This insurance helps in creating wealth for the child’s future. Some of the crucial features of this policy are:

• This plan is created to secure a child financially
• You can add two children only in this insurance
• If parents die during the term, the child premium is cancelled. Then, the total amount, with bonuses, will be paid to the child during maturity
• The policy will be supervised by the parents
• The parents need to have PLI insurance before buying this one

Bonus scheme for Postal Life Insurance

Why should you buy PLI insurance?

• As a policyholder, you can appoint or change your nominated beneficiary.
• You can apply for the loan against your insurance in front of the Heads of the Region appointed by the President of India.
• You can revive your policy if you fail to pay your premium. Two conditions set by the government for reviving your policy are:

1. If you failed six times in paying your premium within the first three years of holding your insurance
2. If you failed 12 times in paying your premium after the first three years of holding your insurance

• You will receive a copy of the original insurance documents irrespective of whether the papers are burned, lost, torn, etc.
• You can easily convert your whole life insurance into an endowment assurance policy 
• The premiums of these insurances are very affordable 
• You can earn attractive bonuses

Guidelines for Postal Life Insurance customers

• Each policy document will have its unique policy number that will help in identifying your insurance. You will make and receive payments against this policy number.
• Keep your policy bond safely as it needs to be submitted during claiming your insurance money. 
• Keep paying your premium regularly. Otherwise, your insurance will relapse, and you won’t be able to claim your insurance. Moreover, you need to pay your insurance at the start of every month.
• You can directly pay your premium from your salary without your intervention. It will be shown on your payslip for taxation purposes. 
• As India has the largest chain of postal services, you can transfer your insurance policy from one place to another.
• You can pay your premium via Cheque, cash, internet banking, over the post office counter, etc.
• You need to be vigilant and share your right address and phone number. As this will be crucial for corresponding your insurance information.
• If you failed six times to pay your premium within the first three years of holding your insurance. If you failed 12 times in paying your premium after the first three years of holding your insurance
• If you want to revive your insurance, you need to submit your medical certificate and pay all your outstanding dues

Forms for Postal Life insurance

• Rural Postal Life Insurance
• RPLI Medical form
• Child Proposal form
• Yugal Suraksha form
• Whole Life Insurance 
• Convertible Whole Life Insurance
• Endowment Assurance form
• Loan Applicable form
• Claims form
• Form for Revival of lapsed Policy
• Maturity Claim Form
• Personal Bond of Indemnity
• Survival Benefit Claim Form

PLI turnaround time 

How to calculate Postal Life Insurance premium?

You can calculate your premium by entering valid data in any premium calculator. A premium calculator will help you find your total premium amount against your ideal corpus investment. Your investment will be affected by your premium amount and the time. You will need to fill in details like your age when you bought the policy, type of policy, sum assured, date of birth, and spouse’s birth date. The details will differ according to your insurance policy.

FAQs

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