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Postal Life Insurance for Government Employees: The Detailed Guide

Life insurance in India has been becoming increasingly popular and widespread among different sections of people. Postal Life Insurance is an insurance scheme introduced initially for the benefit of postal employees and later extended for the benefit of Government employees. The Department of Posts manages it under the supervision of the Government of India.
 

There are six different schemes with various benefits. In addition, the department has introduced an online platform to help the employees access the schemes and pay the premium regularly to make the investment more convenient. Here is a detail about what it means, a brief about the schemes and the benefits of the investment.
 

What is Postal Life Insurance?
 

Postal Life Insurance was first introduced in 1884 for the welfare of postal employees and later in 1888 for the Telegraph Department. The PLI benefits have extended further to the State and Central Government employees, Public Sector Undertakings, Defence and Paramilitary Forces, Educational Institutions headed by the Government, Banke, Local Bodies, etc. The employees can avail of up to ₹50 Lakh under the PLI schemes. The postal life insurance plan details for government employees is available online. Employees can access their policies and pay the premium online.
 

Types Of Postal Life Insurance Plans
 

 

There are six different schemes for postal life insurance for government employees. Here is a detail about the schemes.
 

  • Whole Life Assurance (Suraksha) - The assured amount and the accrued bonus# is payable for the Whole Life Assurance when the insured attains 80 years of age or is paid to the nominee in case of their unexpected death, whichever occurs first.

    The minimum sum assured is ₹20,000, and the maximum is ₹50 Lakh, and loans can be availed of against the scheme after 4 years of investment. The minimum and maximum ages for entry are 19 and 55 years. It can be converted to Endowment Assurance Policy for up to 59 years. Furthermore, the policy can be surrendered after 3 years.

  • Convertible Whole Life Assurance (Suvidha) - The assured amount and the accrued bonus# for this postal life insurance scheme is payable at maturity or is paid to the nominee in case of their unexpected death, whichever occurs first.

    The minimum sum assured is ₹20,000, and the maximum is ₹50 Lakh, and loans can be availed of against the scheme after 4 years of investment. The minimum and maximum ages for entry are 19 and 55 years. It can be converted to Endowment Assurance Policy after 5 years of investment. Furthermore, the policy can be surrendered after 3 years.

  • Endowment Assurance (Santosh) - The assured amount and the accrued bonus# are payable when the insured attains the predetermined age for the maturity benefit, such as 35, 40, 45, 50, 55, 58, and 60 years of age or are paid to the nominee in case of their unexpected death, whichever occurs first.

    The minimum sum assured is ₹20,000, and the maximum is ₹50 Lakh, and loans can be availed of against the scheme after 3 years of investment. The minimum and maximum ages for entry are 19 and 55 years. Furthermore, the policy can be surrendered after 3 years.

  • Joint Life Assurance (Yugal Suraksha) - It is a PLI for government employees wherein the spouse would become eligible for the PLI policy. The life coverage for the spouse is assured with the single premium. The payout is provided to either of the survivors upon the unexpected death of any one of the policyholders.

    The minimum sum assured is ₹20,000, and the maximum is ₹50 Lakh, and loans can be availed of against the scheme after 3 years of investment. The minimum and maximum ages for entry for the spouse are 21 and 45 years. Furthermore, the policy can be surrendered after 3 years, and the bonus# is not payable if the policy is surrendered before 5 years of investment.

  • Anticipated Endowment Assurance (Sumangal) - It is a money-back postal life insurance policy that provides periodical returns to the insured on their survival. And, in case of the unexpected death of the policyholder, the sum assured is provided to the nominee. The policy term is either 15 years or 20 years.

    The minimum age for entry is 19 years, and the maximum is 45 years for the 15 years policy period and 40 for the 20 years policy period. For the 15 years policy, the money back is 20% on completion of 6, 9, and 12 years and the remaining 40% with the accrued bonus# at maturity. And, for the 20 years policy, money-back returns are 20% on completion of 8, 12, and 16 years and the remaining 40% with the accrued bonus# at maturity.

  • Children Policy (Bal Jeevan Bima) - The scheme provides life cover to the policyholders' children of up to 2 children. The eligible age for the children is between 5 and 20 years, and the parent should not be more than 45 years. The maximum sum assured is ₹3 Lakh or the sum assured of the respective parent, whichever is less. The parent should pay the premium for the policy. However, it does not demand the payment of the premium upon the unexpected death of the parent. The policy is not applicable for surrender and loan facilities.
     
Features of Postal Life Insurance
 

There are certain important features of postal life insurance.
 

  • Nomination - The policyholder can nominate a beneficiary and change the nomination when a situation demands.

  • Loan - Policyholders can apply for loans against the chosen PLI scheme.

  • Policy conversion - The policyholders can convert the policy to another preferred option. For example, the Whole Life Assurance Policy can be converted to the Endowment Assurance Policy as per the terms and conditions of the policy.

  • Policy revival - A lapsed PLI scheme can be revived under the following conditions:

    • Policy lapsed due to 6 successive non-payments when the policy is active for less than 3 years.

    • The policy lapsed due to 12 successive non-payments when the policy had been in effect for more than 3 years.

  • Duplicate policy document - A duplicate policy document can be issued to the policyholder in case the original is lost, burnt, torn, or damaged otherwise.
     
Benefits of Investing in Postal Life Insurance
 

Saving in the Postal Life Insurance plan provides the following benefits:
 

  • Affordable premium rates. For instance, the premium for Anticipated Endowment Assurance of ₹5000 life cover is ₹33 monthly for a 15 years policy term for entry age between 19 and 36 years.
  • Employees can transfer the respective scheme to any circle in the country.
  • Simple, easy, and quick claim processes
  • Online premium payment methods
  • Conversion of the policy
  • Investment applicable for availing of loan
  • Postal life insurance qualifies for the tax* deduction and exemption benefits under the Income Tax Act 1961.
     
Conclusion
 

Postal Life Insurance schemes were introduced to widen the benefits of life insurance in India to Government employees. It provides six different schemes with life cover up to ₹50 Lakh. In addition, employees can also avail of the loan facility after certain years of investment based on the scheme. Moreover, the employees can access the policy, pay the premium, and check the status of their PLI online. It is a simple and user-friendly process. Furthermore, the PLI is affordable and qualifies for a tax* deduction and exemption benefits under the Income Tax Act 1961.
 

L&C/Advt/2023/Jan/0003

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Tata AIA Life Insurance

A joint venture between Tata Sons Pvt. Ltd. and AIA Group Ltd. (AIA),  Tata AIA Life Insurance  is one of the leading life insurance providers in India. We post everything you need to know about life insurance, tax savings and a variety of lateral topics such as savings and investments in this space. You can access and read a host of different blogs, articles and pages at the Tata AIA Life Insurance Knowledge Center or get in touch with us with any queries or questions!

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Frequently Asked Questions

Is the maturity benefit of PLI tax-free?

Yes, the maturity benefit and the accrued bonus# qualify for the tax exemption benefits under Section 10(10D) of the Income Tax Act 1961.

How can I check the status of my PLI policy?

You can check the status of your PLI policy online by logging into the official website of the India Post.

Disclaimer

  • Insurance cover is available under the product.
  •  The products are underwritten by Tata AIA Life Insurance Company Ltd.
  • The plans are not a guaranteed issuance plan, and it will be subject to Company’s underwriting and acceptance.
  • For more details on risk factors, terms and conditions please read sales brochure carefully before concluding a sale.
  • This blog is for information and illustrative purposes only and does not purport to any financial or investment services and do not offer or form part of any offer or recommendation. The information is not and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.
  • Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company.
  • Every effort is made to ensure that all information contained in this blog is accurate at the date of publication, however, the Tata AIA Life shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.
  • * Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfilment of conditions stipulated therein. Income Tax laws are subject to change from time to time. Tata AIA Life Insurance Company Ltd. does not assume responsibility on tax implications mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to you.
  • #These bonuses are not guaranteed in nature. The Company may declare Cash Bonus rate annually in advance. The Cash Bonuses if declared, will be applicable provided all due premiums have been paid.