Postal Life Insurance

Postal Life Insurance (PLI) is a unique life insurance scheme that is offered by the Indian Postal Department. It was introduced in 1884, and since then, it has been providing life insurance coverage to individuals at affordable premiums. PLI is a government-sponsored scheme that is designed to provide financial security to individuals and their families. In this article, we will explore the various features and benefits of PLI.

Features of Postal Life Insurance:

1. Affordable Premiums: PLI offers life insurance coverage at affordable premiums. The premium rates are much lower compared to other life insurance schemes, making it an ideal choice for individuals from low-income groups.
2. Flexibility: PLI offers flexibility in terms of premium payment options. The premiums can be paid on a monthly, quarterly, half-yearly, or yearly basis, depending on the convenience of the policyholder.
3. High Bonus: PLI offers a high bonus to policyholders. The bonus amount is added to the sum assured, which increases the policy’s value. The bonus rate is reviewed every year and is subject to change.
4. Loan Facility: PLI policyholders can avail of a loan against their policy. The loan amount is calculated based on the policy’s surrender value, and the interest rate charged on the loan is comparatively lower than other loans.
5. Surrender Value: PLI policies have a surrender value, which is payable to the policyholder if they decide to surrender their policy before the completion of the policy term. The surrender value is calculated based on the number of premiums paid and the duration of the policy.

Benefits of Postal Life Insurance:

1. Death Benefit: PLI provides a death benefit to the policyholder’s nominee in case of their unfortunate demise during the policy term. The death benefit is payable as a lump sum or in installments, depending on the policy’s terms and conditions.
2. Maturity Benefit: PLI policies provide a maturity benefit to the policyholder on the completion of the policy term. The maturity benefit includes the sum assured and the bonus amount, which is payable to the policyholder.
3. Tax Benefits: PLI policies offer tax benefits to policyholders under Section 80C and Section 10(10D) of the Income Tax Act. The premiums paid towards the policy are eligible for tax deduction under Section 80C, and the death/maturity benefit received is tax-free under Section 10(10D).
4. Nomination Facility: PLI policies offer a nomination facility to policyholders, allowing them to nominate a person who will receive the policy benefits in case of their unfortunate demise.
5. Bonus Facility: PLI policies provide a bonus facility to policyholders, which is payable on the completion of the policy term. The bonus amount is calculated based on the policy’s terms and conditions and is subject to change every year.

Postal vs LIC life insurance

Life insurance is an essential financial tool that provides financial security to individuals and their families in the event of the policyholder’s unfortunate demise. Life insurance policies are offered by various insurance companies in India, including the Indian Postal Department and the Life Insurance Corporation of India (LIC). In this article, we will compare Postal Life Insurance (PLI) and LIC Life Insurance policies based on their features, benefits, and premiums.

Features:

Postal Life Insurance:

1. PLI offers life insurance coverage at affordable premiums, making it an ideal choice for individuals from low-income groups.
2. PLI policies offer flexibility in terms of premium payment options. The premiums can be paid on a monthly, quarterly, half-yearly, or yearly basis, depending on the convenience of the policyholder.
3. PLI policies provide a high bonus to policyholders, which is added to the sum assured and increases the policy’s value.
4. PLI policies offer a loan facility, allowing policyholders to avail of a loan against their policy at a lower interest rate than other loans.

LIC Life Insurance:

1. LIC offers a range of life insurance policies, including term insurance, endowment policies, and money-back policies.
2. LIC policies offer a high sum assured, providing significant life insurance coverage to policyholders.
3. LIC policies offer flexibility in terms of premium payment options, allowing policyholders to choose the payment frequency that suits their needs.
4. LIC policies offer tax benefits to policyholders under Section 80C and Section 10(10D) of the Income Tax Act.

Benefits:

Postal Life Insurance:

1. PLI policies provide a death benefit to the policyholder’s nominee in case of their unfortunate demise during the policy term. The death benefit is payable as a lump sum or in installments, depending on the policy’s terms and conditions.
2. PLI policies offer a maturity benefit to the policyholder on the completion of the policy term. The maturity benefit includes the sum assured and the bonus amount, which is payable to the policyholder.
3. PLI policies offer tax benefits to policyholders under Section 80C and Section 10(10D) of the Income Tax Act.
4. PLI policies provide a nomination facility to policyholders, allowing them to nominate a person who will receive the policy benefits in case of their unfortunate demise.

LIC Life Insurance:

1. LIC policies provide a death benefit to the policyholder’s nominee in case of their unfortunate demise during the policy term. The death benefit is payable as a lump sum or in installments, depending on the policy’s terms and conditions.
2. LIC policies offer a maturity benefit to the policyholder on the completion of the policy term. The maturity benefit includes the sum assured and any bonuses that may have accrued during the policy term.
3. LIC policies offer tax benefits to policyholders under Section 80C and Section 10(10D) of the Income Tax Act.
4. LIC policies provide a nomination facility to policyholders, allowing them to nominate a person who will receive the policy benefits in case of their unfortunate demise.

Premiums:

Postal Life Insurance:

PLI offers life insurance coverage at affordable premiums, making it an ideal choice for individuals from low-income groups. The premium rates are much lower compared to other life insurance schemes.

LIC Life Insurance:

LIC policies offer a range of premium payment options, allowing policyholders to choose the payment frequency that suits their needs. The premium rates vary depending on the type of policy and the sum assured.

When it comes to life insurance policies, two of the most popular options in India are Postal Life Insurance (PLI) and Life Insurance Corporation of India (LIC). While both provide financial security to policyholders and their families in the event of an unfortunate demise, they differ in several ways. In this article, we will compare PLI and LIC life insurance policies based on various parameters.

Policy options:

PLI offers only two types of policies: Endowment Assurance (EA) and Whole Life Assurance (WLA). On the other hand, LIC offers a range of policies, including term insurance, endowment policies, money-back policies, and unit-linked insurance plans (ULIPs).

Premiums:

PLI offers life insurance coverage at affordable premiums, making it an ideal choice for individuals from low-income groups. The premium rates are much lower compared to other life insurance schemes. LIC policies offer a range of premium payment options, allowing policyholders to choose the payment frequency that suits their needs. The premium rates vary depending on the type of policy and the sum assured.

Sum assured:

PLI policies offer a lower sum assured compared to LIC policies. While PLI policies can provide coverage of up to Rs. 50 lakhs, LIC policies can offer coverage of up to Rs. 25 crores.

Bonus:

PLI policies provide a high bonus to policyholders, which is added to the sum assured and increases the policy’s value. LIC policies also offer bonuses, but the amount may vary depending on the type of policy and the insurance company’s performance.

Maturity benefit:

Both PLI and LIC policies offer maturity benefits to policyholders on the completion of the policy term. The maturity benefit includes the sum assured and any bonuses that may have accrued during the policy term.

Death benefit:

Both PLI and LIC policies provide a death benefit to the policyholder’s nominee in case of their unfortunate demise during the policy term. The death benefit is payable as a lump sum or in installments, depending on the policy’s terms and conditions.

Nomination facility:

Both PLI and LIC policies provide a nomination facility to policyholders, allowing them to nominate a person who will receive the policy benefits in case of their unfortunate demise.

Tax benefits:

Both PLI and LIC policies offer tax benefits to policyholders under Section 80C and Section 10(10D) of the Income Tax Act.

Summary:

PLI and LIC are both popular choices for life insurance policies in India. While PLI policies offer affordable premiums, high bonuses, and a wider coverage range, LIC policies offer a broader range of policy options, higher sum assured, and a more established reputation. Ultimately, the choice between PLI and LIC life insurance policies depends on the individual’s financial situation, coverage needs, and other preferences.

How to get postal life insurance?

Getting Postal Life Insurance (PLI) is a straightforward process that can be completed in a few simple steps. Here’s how you can get PLI:

1. Visit the nearest post office: To get PLI, you will need to visit the nearest post office that provides PLI services. You can find a list of post offices that offer PLI on the India Post website.
2. Collect the PLI application form: Once you are at the post office, ask for the PLI application form. The form is available for free and can be collected from the counter.
3. Fill in the application form: After collecting the application form, you need to fill in all the necessary details accurately. The form will require you to provide personal information such as name, age, address, occupation, and income details.
4. Attach the necessary documents: Along with the application form, you will need to attach some documents such as a copy of your address proof, identity proof, and a passport-sized photograph.
5. Choose the type of policy: After filling in the application form and attaching the necessary documents, you need to choose the type of policy that you want to purchase. PLI offers two types of policies – Endowment Assurance (EA) and Whole Life Assurance (WLA).
6. Calculate the premium: The premium for the PLI policy will be calculated based on the type of policy you choose, the sum assured, and the policy term. You can calculate the premium using the premium calculator available on the India Post website.
7. Make the payment: After calculating the premium, you need to make the payment. You can pay the premium in cash, or you can also pay through a demand draft or cheque.
8. Submit the application form: Once you have made the payment, submit the application form along with the necessary documents at the post office.
9. Get the policy document: After submitting the application form, you will receive a policy document within a few days. The policy document will contain all the details of your PLI policy.

In conclusion, getting Postal Life Insurance is a simple and easy process that can be completed by visiting the nearest post office and following the steps mentioned above. It is essential to provide accurate information and attach all the necessary documents to ensure a smooth and hassle-free process.

How can I surrender postal life insurance policy?

Surrendering a Postal Life Insurance (PLI) policy is a process where the policyholder can terminate the policy and receive the surrender value. The surrender value is the amount that the policyholder is entitled to receive after deducting the surrender charges and any outstanding premiums. If you wish to surrender your PLI policy, here’s what you need to do:

1. Visit the nearest post office: To surrender your PLI policy, you need to visit the nearest post office that offers PLI services.
2. Collect the surrender form: Ask for the surrender form from the post office. The surrender form is available for free, and you can collect it from the counter.
3. Fill in the surrender form: Fill in all the necessary details in the surrender form accurately. The form will require you to provide personal details such as name, policy number, address, and bank account details.
4. Attach the necessary documents: Along with the surrender form, you will need to attach some documents such as a copy of your policy document, identity proof, and bank account details.
5. Submit the surrender form: After filling in the surrender form and attaching the necessary documents, submit the form at the post office.
6. Receive the surrender value: After submitting the surrender form, the post office will process your request and calculate the surrender value. The surrender value will be paid to your bank account within a few days.

It is essential to note that surrendering a PLI policy may not be the best option in all cases. Surrendering a policy means that you will no longer be covered by the policy, and you will lose out on the potential benefits such as bonuses and maturity benefits. Moreover, the surrender value may not be as high as the sum assured or the maturity benefit. Therefore, before surrendering your PLI policy, it is advisable to consult with your financial advisor or insurance agent to understand the implications and explore other options.

FAQs about postal life insurance

Conclusion

Postal Life Insurance is an excellent life insurance scheme that provides financial security to individuals and their families at affordable premiums. PLI policies offer a range of benefits, including death and maturity benefits, tax benefits, nomination facility, and loan facility. The scheme is flexible in terms of premium payment options and provides a high bonus to policyholders. PLI is an ideal choice for individuals from low-income groups who are looking for a reliable and affordable life insurance scheme.