Postal Life Insurance Plans: Types, Benefits & Application

Postal Life Insurance (PLI) offers a range of life insurance policies to cater to different financial goals. Whether you're looking for long-term financial security or periodical returns, PLI provides affordable premiums, tax benefits, and reliable coverage. In this comprehensive guide, we’ll explore the various types of PLI policies, their benefits, and how to calculate your premiums.

What is Postal Life Insurance (PLI)?

Postal Life Insurance (PLI) is a life insurance product offered by India Post. It aims to provide financial protection to families in case of the policyholder’s demise while offering attractive savings and investment options. PLI has a wide array of plans catering to individual needs, including whole life assurance, endowment policies, joint life assurance, and children’s policies.

PLI has gained popularity due to its affordability, reliability, and the trust it carries as part of the government-run services. The plans provide excellent benefits with competitive bonuses and flexible terms.

Types of Postal Life Insurance Plans

PLI offers various insurance plans that provide security to policyholders at different stages of their life. Here's an overview of the most popular plans:

1. Whole Life Assurance (Suraksha)

This plan provides a lifelong cover to the policyholder with the option of an assured sum along with accrued bonuses. The policy can be claimed either on the policyholder attaining the age of 80 years or on the insured's death, whichever occurs first.

Key Features:

Age at Entry: 19 to 55 years
Sum Assured: ₹20,000 to ₹50 lakh
Loan Facility: Available after 4 years
Surrender: Can be surrendered after 3 years, but not eligible for bonuses if surrendered before 5 years
Bonus: ₹76 per ₹1000 sum assured annually
Premium Paying Age: You can opt for premium payment age of 55, 58, or 60 years
Conversion Option: Can be converted into Endowment Assurance Policy up to 59 years (conditions apply)
Proportionate Bonus: If the policy is surrendered after 5 years, the bonus is paid proportionately on the reduced sum assured

2. Convertible Whole Life Assurance (Suvidha)

The Suvidha plan is similar to the Whole Life Assurance policy but with an additional feature. This plan allows policyholders to convert their policy into an Endowment Assurance policy after five years, providing more flexibility.

Key Features:

Age at Entry: 19 to 50 years
Sum Assured: ₹20,000 to ₹50 lakh
Loan Facility: Available after 4 years
Surrender: Available after 3 years but not eligible for bonus if surrendered before 5 years
Bonus: ₹76 per ₹1000 sum assured annually
Conversion Option: Convertible into Endowment Assurance after 5 years, no later than 6 years. If not converted, it remains as Whole Life Assurance.
Endowment Conversion Bonus: On conversion, the bonus rate of Endowment Assurance will apply.

3. Endowment Assurance (Santosh)

The Santosh plan provides coverage until the policyholder reaches a predetermined age (35, 40, 45, 50, 55, 58, or 60 years). In case of death, the beneficiary is paid the sum assured with the accrued bonus.

Key Features:

Age at Entry: 19 to 55 years
Sum Assured: ₹20,000 to ₹50 lakh
Loan Facility: Available after 3 years
Surrender: Available after 3 years, but no bonus if surrendered before 5 years
Bonus: ₹52 per ₹1000 sum assured annually
Proportionate Bonus: If surrendered after 5 years, a proportionate bonus on the reduced sum assured is paid.

4. Anticipated Endowment Assurance (Sumangal)

The Sumangal plan is designed for individuals who need periodic returns. This plan provides money-back benefits, with survival benefits paid periodically over the policy term. In case of death, the full sum assured with accrued bonus is paid to the nominee.

Key Features:

Policy Term: 15 years or 20 years
Age at Entry:
- 20-year policy: 19 to 40 years
- 15-year policy: 19 to 45 years
Sum Assured: ₹20,000 to ₹50 lakh
Bonus: ₹48 per ₹1000 sum assured annually
Survival Benefits:
- 15-Year Policy: 20% at 6, 9, and 12 years, 40% with accrued bonus on maturity.
- 20-Year Policy: 20% at 8, 12, and 16 years, 40% with accrued bonus on maturity.

5. Joint Life Assurance (Yugal Suraksha)

The Yugal Suraksha plan provides life insurance coverage to both spouses under a single policy, with the sum assured and bonus payable in the event of the death of either spouse.

Key Features:

Age at Entry: 21 to 45 years (for both spouses)
Sum Assured: ₹20,000 to ₹50 lakh
Loan Facility: Available after 3 years
Surrender: Available after 3 years, but not eligible for bonus if surrendered before 5 years
Bonus: ₹52 per ₹1000 sum assured annually
Policy Term: 5 to 20 years
Death Benefit: Paid to the survivor in case of the death of the spouse or the main policyholder.

6. Children Policy (Bal Jeevan Bima)

The Bal Jeevan Bima scheme provides life insurance cover to children between the ages of 5 to 20 years. The policyholder (parent) is responsible for paying the premiums, but in case of the parent’s death, no premium is required on the children’s policy.

Key Features:

Age at Entry (for children): 5 to 20 years
Sum Assured: ₹3 lakh or the sum assured of the parent, whichever is less
Premium Payment: Paid by the parent
Loan Facility: Not available
Bonus: ₹52 per ₹1000 sum assured annually
Policy Holder Responsibility: The parent is responsible for premium payment; however, no premium is required if the parent passes away.

How to Calculate Premium for Postal Life Insurance

PLI premiums depend on various factors such as the type of policy, sum assured, entry age, and the duration of coverage. You can calculate your premium using the following methods:

1. Use the PLI Premium Calculator

India Post offers premium calculators for different PLI schemes to give you an estimate of your premium amount. Here are the calculators for some of the popular policies:

2. Manual Calculation

The premium can also be manually calculated based on your sum assured, age, and policy term. However, this is more complex than using an online calculator, as it involves understanding the internal rate of return (IRR) and the bonus structure of the plan.

Comparison PLI with Other Bank Policies

When comparing Postal Life Insurance with other bank policies, it's essential to understand the differences in terms of premiums, returns, and flexibility. Here's how PLI stacks up:

Affordability: PLI policies are generally more affordable than many private insurance policies. The premiums are low, and the bonus structure is lucrative.
Government Backing: PLI is backed by the Indian government, providing a sense of security that private insurance companies cannot match.
Tax Benefits: Just like other insurance policies, PLI offers tax deductions under Section 80C of the Income Tax Act.
Bonus Rates: The bonus declared by PLI (₹52 to ₹76 per ₹1000 sum assured) is quite competitive when compared to other banks and private insurers.

Conclusion

Postal Life Insurance (PLI) offers a wide array of policies to suit different financial needs, from long-term coverage to money-back options. With affordable premiums, government backing, and attractive bonus rates, it stands out among other insurance policies available in the market. Whether you're looking for coverage for yourself, your spouse, or your children, PLI has a suitable plan for you.

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