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Types of Postal Life Insurance

Providing financial security to loved ones is a priority for many and life insurance is an efficient tool to ensure the same. One of the oldest insurance products in the country, postal life insurance is an insurance scheme started in 1884. The scheme now comes under the Department of Posts, Government of India. Known for its cost-effectiveness, the insurance product offers more returns at lesser premiums. Let’s find out more about the scheme and its different types.
 

What is a Postal Life Insurance Scheme (PLO)
 

Initially introduced as an insurance scheme for the employees of the postal service, the PLI scheme is now offered to the employees of the central/state governments, public sector undertakings, nationalised banks, government-aided educational bodies, etc. The features of postal life insurance are as follows:
 

  • The Indian postal life insurance provides a maximum sum assured of ₹50 Lakh.

  • There are tax* exemptions offered under Section 88 of the Income Tax* Act.

  • In case of an advance premium of 6 months, you can avail of a premium discount of 1% of the value.

  • A premium discount of 2% of the value is offered if you pay an advance premium of 12 months.

  • The scheme allows the policyholder to nominate a beneficiary. He/she can also change the beneficiary’s name according to circumstances.

  • You can also avail of loans under postal life insurance schemes.

  • In case your policy lapses due to any reason, you can revive it under certain conditions.

  • You can also convert postal life insurance policy from whole life assurance to endowment assurance or vice versa.
     

Postal Life Insurance Types
 

The postal life insurance scheme has six types of policies which are as follows:
 

  • Suraksha: Whole life Assurance Policy

    A whole life assurance policy offers the assured sum and the accumulated bonus2 after the policyholder reaches the age of 80 or when the insured dies, whichever may happen first.

    • Age criteria: 19-55 years

    • Minimum sum assured: ₹20,000

    • Maximum sum assured: ₹50,00,000

    • You can avail of loans after the completion of four years.

    • You can surrender the policy after three years.

    • You can convert the policy into an endowment policy after one year and before the age of 57 years.
       

  • Santosh: Endowment Assurance Policy

    Under an endowment policy, the assured sum and the bonus2 are given to the policyholder after a pre-determined maturity age. In case of the death of the insured, the sum goes to the beneficiary or legal heir.

    • Age criteria: 19-55 years

    • Minimum sum assured: ₹20,000

    • Maximum sum assured: ₹50,00,000

    • You can surrender the policy after three years.

    • You can convert the policy into any other type of endowment policy as per the terms and conditions of the scheme.
       

  • Suvidha: Convertible Whole Life Insurance Policy

    The assured sum and the bonus2 are given to the policyholder after a pre-determined maturity age. In case of the death of the insured, the sum goes to the beneficiary or legal heir.

    • Age criteria: 19-50 years

    • Minimum sum assured: ₹20,000

    • Maximum sum assured: ₹50,00,000

    • You can avail of loans after the completion of four years.

    • You can surrender the policy after three years.

    • You can convert the policy into an endowment policy after five years and before the age of 55 years. If not converted, the policy converts to a whole life assurance by default.
       

  • Sumangal: Anticipated Endowment Assurance Policy

    The policy is a money-back policy that offers a maximum assured amount of ₹50,00,000. It is suitable for people who wish for periodic returns. The periodic payments are not considered if the insured dies, and the complete assured sum and the bonus2 are given to the nominee or legal heir.

    • The policy with a tenure of 15 years has age criteria of 19-45 years.

    • The policy with a tenure of 20 years has age criteria of 19-40 years.

    • The periodical survival benefits for the 15-year tenure policy: 20% of the sum assured paid after six, nine and twelve years. While 40% of the assured sum with a bonus2 is offered on maturity.

    • Periodical survival benefits for 20-year tenure policy: 20% of the sum assured paid after eight, twelve and sixteen years. While 40% of the sum assured with a bonus2 is offered at maturity.
       

  • Yugal Suraksha: Joint Life Assurance Policy

    This scheme needs any one of the spouses to be eligible for the PLI scheme. Under a joint life assurance policy, both spouses are covered under the sum assured with a single premium.

    • Minimum sum assured: ₹20,000

    • Maximum sum assured: ₹50,00,000

    • You can avail of loans after the completion of three years.

    • The death benefit is given to either of the survivors if any one spouse dies.
       

  • Bal Jeevan Bima: Children Policy

    The scheme is aimed at providing insurance coverage to the policyholder’s children.

    • Maximum number of children eligible: 2

    • Age criteria of children: 5-20 years

    • Age limit of the policyholder: Should not exceed 45 years

    • No premium payment is required for Bal Jeevan Bima if the policyholder dies

       

Note: The above schemes can be availed for physically handicapped individuals also, for which the premiums are determined through a medical examination. Also, you can get a suitable PLI scheme through a postal life insurance agent.
 

What is a Postal Life Insurance Scheme (PLO)
 

 

After completion of the required number of years, the policies under PLI allow you to avail of loans at a PIL interest rate of 10% per annum. This loan interest is calculated on six months basis.
 

Conclusion
 

As a breadwinner, you can take care of your loved ones’ needs in your presence.
 

You can buy a suitable policy if you are not eligible for the postal life insurance plans at affordable prices with Tata AIA. The life insurance company offers multiple insurance plans that ensure the protection of your loved ones’ smiles in your absence.


L&C/Advt/2022/Dec/3399 

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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

What is meant by postal life insurance?

The postal life insurance scheme is an insurance scheme for the employees of the central/state governments, public sector undertakings, nationalised banks, government-aided educational bodies, etc. with a maximum sum assured of ₹50 Lakh.

Who is eligible for postal life insurance? 

The post insurance scheme is eligible for the employees of:
 

  • Central/state governments

  • Public sector undertakings

  • Nationalised banks

  • Government-aided educational institutions

  • Autonomous bodies

  • Local bodies

  • Cooperative societies, etc. 

How is the interest rate for PLI loans calculated?

The PLI interest rate is calculated on a six months basis at 10% per annum. The loan limit is calculated based on the surrender value of the policy.

Disclaimer

  •  Insurance cover is available under the product.
  •  The products are underwritten by Tata AIA Life Insurance Company Ltd.
  • The plans are not guaranteed issuance plans, and they will be subject to Company’s underwriting and acceptance.
  • For more details on risk factors, terms and conditions please read the 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 does 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.
  • 2These 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.