Life insurance is an important financial requirement for every individual responsible for handling a family in any way. The Government of India offers a range of benefits to enhance the benefits received from a life insurance plan. In this regard, postal life insurance is no exception. It helps the policyholder with the sum assured to secure their family in the event of their unexpected demise and provides additional financial benefits such as availing of a loan to manage an emergency. The PLI interest rate is based on such applicable loans. Here is a detail about it for your understanding.
 

Before we get started, let us understand what postal life insurance means.
 

What Is Postal Life Insurance?

Postal life insurance(PLI) is a scheme introduced by the Government of India to provide life insurance benefits for professionals, Government and Semi-Government employees.
 

Postal life insurance offers the policyholders an option to avail of loans against the sum assured. It is against a percentage of the insured sum that helps finance short-term emergencies.
 

What is the Postal Life Insurance Interest Rate?
 

The policyholder of the insurance policies will be applicable for availing of a loan after completing a minimum of 3-4 years. And the postal PLI interest rate is charged at 10% per annum on a six-month basis for the loans availed of against the PLI schemes. The interest amount is payable every six months.
 

Here are a few pointers regarding the interest rate in PLI.
 

• The relevant officials calculate the interest on the PLI loan on a half-yearly basis. Therefore, based on the postal PLI interest rate, the policyholder has to pay the interest amount every half-yearly before the due date.
• If the policyholder fails to make the interest payment timely, the pending payable interest amount will get added to the outstanding loan amount. Furthermore, the postal life insurance interest rate will depend on the total outstanding loan amount.
• If the policyholder fails to make the interest payments three times, the insurance provider will process to surrender the insurance plan. And the surrender value generated will be utilised by the insurer to pay off the pending interests and the outstanding loan amount. After the surrender process, the benefits from the PLI scheme will become void.
   

Eligibility Conditions for Availing of a Loan Under the PLI Scheme

Before applying for a loan under the PLI scheme, the policyholder must know the eligibility conditions and the insurance policies.
 

• A minimum of 3 years is required to apply for a loan against endowment and joint life assurance.
• A minimum of 4 years is required to apply for a loan against whole life and convertible whole life assurance.
• The policyholder can avail of the PLI loan to a maximum of a prefixed portion of the determined surrender value during policy inception. However, the loan amount should not be less than ₹1000.
• Policyholders can avail of two loans based on the insurance provider's discretion.
  

 

What are the Advantages of Availing a Loan Under the PLI Scheme?

People prefer the PLI scheme, considering the loan benefits based on the following advantages.
 

• The loan is available against the PLI scheme.
• The interest rates are nominal and extremely affordable.
• The loan amount can help manage a short-term emergency.
• The process of availing and managing the loan is simple and hassle-free.
   

Enhancing Life Insurance Benefits

Suppose the policyholder is the sole earning member in the family and requires additional savings and investment benefits to secure their future. In that case, they can enhance their life insurance benefits by purchasing life insurance policies from other insurance providers.

For example, our Tata AIA life insurance company offers a comprehensive life insurance plan that combines life insurance and savings benefit. The insurer will use one portion of the premium to provide life coverage and the other to provide guaranteed¹ returns or market-linked returns at maturity, as per your preference. The policyholders can also avail of add-on riders^# from the life insurance scheme to ensure financial support during a medical emergency such as getting affected due to a critical illness, disability, etc.
 

Conclusion

Purchasing life insurance is an important financial obligation. The Government of India offers postal life insurance plans for the employees working in the Government and Semi-Government sectors and professionals to secure their families' financial future.

In addition, the scheme provides the option to avail of loans to extend the financial benefits provided in the postal life insurance. And the interest rate is charged at 10% per annum on a half-monthly basis. However, a few terms and conditions are related to the PLI loan. Therefore, understanding the PLI loan details and the applicable interest rates is important to purchase the life insurance and avail of the loan, and repay it comfortably. 

L&C/Advt/2022/Oct/2683