As a government employee, one can enjoy some significant benefits. One of these benefits includes Postal Life Insurance (PLI). As a matter of fact, PLI covers multiple departments in the State and Central Government sections, financial institutes, nationalised banks, and public sector undertakings.
With PLI, government employees can avail the benefits of insurance at a much lower rate compared to those offered by private sector insurance companies.
What is Postal Life Insurance (PLI) for Government Employees?
The Postal Life Insurance (PLI) is an insurance plan established in the year 1884 and is currently managed by the Department of Posts under the Government of India. It was initiated with a purpose to ensure the well-being of the government employees through adequate insurance coverage.
Various Policies Offered By Postal Life Insurance
The following are the insurance plans offered under Postal Life Insurance.
Whole Life Insurance (SURAKSHA)
The whole life insurance (SURAKSHA) has a minimum entry age of 18 years and a maximum entry age of 55 years. It offers a sum assured amount along with bonus (if any) to the insured individual as maturity benefits. In case of the sudden death of the insured, the sum assured amount along with the bonus (if any) is paid to the beneficiaries.
The minimum sum assured amount of the plan is INR 20,000 while the maximum is INR 50 lakh. Also, if the policy has been active for more than a year, and the insured individual is less than 57 years of age, then the plan can be converted into an endowment policy.
Moreover, you can avail a loan on the whole life insurance plan. But if the loan is availed before the completion of five years of the policy, then you will not be eligible for any bonuses.
Joint Life Insurance (YUGAL SURAKSHA)
If you are eligible for a Postal Life Insurance plan, the benefits can be extended to the spouse with a joint life insurance plan. This way, both the spouses can avail the benefits of the policy with having to pay only a single premium amount.
Endowment Insurance (SANTOSH)
The endowment plan is much similar to the whole life insurance plan. Here, the insured individual will be provided with the sum assured amount along with the collected bonus (if any) as maturity benefits. Also, the beneficiaries of the policy will receive the death benefits along with the bonus amount (if any) in case of the insured individual’s sudden death.
The policy allows to avail loans on it after the completion of three years. However, if a loan is taken before the policy completes five years, then it will void any bonuses accrued so far. The endowment plan comes with a minimum entry age of 18 years and a maximum entry age of 55 years.
Convertible Whole Life Assurance
A convertible whole life assurance policy can be covered into an endowment plan after completion of five years. However, at the time of conversion, the insured individual should be below the age of 55 years.
In case the policy is not converted into an endowment plan within six years of completion, then it will be treated as a whole life insurance plan. Also, you can avail a loan or surrender the policy only after completing three years of the plan term.
Anticipated Endowment Assurance
If you are looking for a policy that offers periodic returns, then anticipated endowment assurance is just the right choice for you. This policy provides two policy terms – 15 years and 20 years.
For 15 years policy term, the benefits are paid out as follows:
- After completing six years – 20%
- After completing nine years – 20%
- After completing 12 years – 20%
- Upon completing 15 years – 40%
For 20 years policy term, the benefits are paid out as follows:
- After completing eight years – 20%
- After completing 12 years – 20%
- After completing 16 years – 20%
- Upon completing 20 years – 40% along with the accrued bonuses
In case of death of the insured individual, the beneficiaries of the policy will not receive periodic payments, but instead, the sum assured is paid as a lump sum amount.
Benefits of Postal Life Insurance
The following are some attractive benefits of PLI:
- Premiums paid towards PLI are liable for tax benefits just like other insurance plans
- The policy offers immediate coverage upon acceptance of its terms and conditions
- It offers secure transfer from anywhere across the country
- You can easily convert a whole life insurance plan to endowment plan
- You can avail loans on the endowment insurance plan upon completing three years
- In case of delay in the premium payments, a charge of INR 1 for every INR 100 of sum assured is applicable
Things To Remember
Here are a few things to keep in mind about Postal Life Insurance plans.
- Even though PLI is gaining recognition in the society, the plan is still not available at all the post offices in India. A few selected postal offices with a PLI division offer this plan. Moreover, this plan cannot be purchased online, and one has to visit the post office to invest in it personally.
- The minimum entry age of the plan is 18 years, and the maximum entry age is 55 years.
- The maximum sum assured amount is approx. INR 10 lakh.
- Government employees can continue with the policy even after they leave the job.
- Premiums of the policy can be paid on a monthly, half-yearly, or annual basis.
- You can surrender the policy at any point in time. The endowment plans can be surrendered after completing three years, whereas the whole life insurance plans can be surrendered after completing four years.
Post Life Insurance is quite an attractive plan, especially if you are a government employee. It is one of the most affordable and manageable insurance options that will cater to your investment needs as per your financial situation.
For those who cannot avail this service should still consider buying a life insurance plan to safeguard the financial needs of their loved ones. You can browse term insurance plans available on Finserv MARKETS that offer comprehensive coverage, customised plans that best suit your needs, swift claim settlements, and so much more.
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