PLI – POSTAL LIFE INSURANCE
“Postal Life Insurance is among India’s oldest insurance programs, having been introduced early in its history. One of the standout characteristics of PLI schemes is their ability to provide substantial returns, including bonuses, to policyholders while maintaining remarkably affordable premiums. The Postal Life Insurance schemes stand out as some of the nation’s most suitable and economically attractive options for personal investment.”
What is Postal Life Insurance?
The Postal Life Insurance Scheme provides life insurance coverage with the potential for high returns on premiums paid. The maximum sum assured, or the maximum coverage amount, available under this scheme is Rs. 50 lakh. This policy is exclusively offered by the Government of India and is accessible to a wide range of eligible individuals and groups, including:
- Employees of Central and State Public Sector Enterprises
- Employees of Central and State Governments
- Employees of Government Aided Educational Institutions
- Employees of Universities
- Employees of Autonomous Bodies
- Employees of Local Bodies
- Members of Cooperatives Societies
- Participants in Joint Ventures with a minimum of 10% Government or PSU stake
Additionally, Postal Life Insurance manages a group insurance scheme tailored specifically for “Gramin Dak Sevaks,” who are Extra Departmental Employees of the Department of Posts. This underscores the comprehensive reach and inclusivity of the Postal Life Insurance program, offering financial security and coverage to a diverse spectrum of individuals and groups across India.
Rs 399 Insurance Scheme at the Post Office
Features of Postal Life Insurance Policy :
Certainly, here are some key features of a Postal Life Insurance (PLI) policy
Nomination Facility:
- Beneficiary Selection: The policyholder has the option to nominate a beneficiary, who will receive the policy’s benefits in the event of the policyholder’s demise. This ensures that the benefits of the policy are directed to the intended recipient, typically a family member or loved one.
- Flexibility: The policyholder can choose the nominee and can also make changes to the nomination during the policy’s tenure. This flexibility allows the policyholder to adapt to changing circumstances or relationships over time.
- Multiple Nominations: In some cases, policyholders may have the option to nominate multiple beneficiaries and specify the share of benefits each nominee should receive. This can be particularly useful in complex family or financial situations.
- Contingent Nominations: Some PLI policies also offer the option for contingent nominations, where secondary beneficiaries are named in case the primary nominee is unavailable or deceased at the time of the policyholder’s demise.
The nomination facility adds an essential layer of customization and control to PLI policies, ensuring that the policyholder’s wishes regarding the distribution of policy benefits are respected and followed. It provides peace of mind by ensuring that loved ones or chosen beneficiaries will receive the financial support provided by the insurance policy as intended by the policyholder.
Loan Facility :
- Collateral Option: Policyholders have the option to use their Postal Life Insurance policy as collateral to secure a loan. This means they can pledge their policy to the Heads of the Region/Circle on behalf of the President of India.
- Eligibility: To qualify for a loan, an Endowment Assurance policy must have reached a minimum of three years of maturity, while a Whole Life Insurance policy requires a minimum of four years of policy coverage.
- Loan Amount: The loan amount is typically determined as a percentage of the policy’s surrender value, which is based on the accumulated cash value and premiums paid.
- Interest Rates: Loans against PLI policies usually come with competitive and favorable interest rates, with interest typically deducted from the policy’s surrender value.
- Repayment: The policyholder can repay the loan along with accrued interest at a later date. Failure to repay may result in deductions from the policy’s maturity or death benefits.
- Assignment Option: Postal Life Insurance policies also offer assignment facilities. This allows policyholders to assign or transfer the policy’s rights, benefits, or proceeds to another individual or entity, such as a financial institution, for various financial purposes.
These features provide policyholders with financial flexibility, enabling them to access funds when needed while maintaining their life insurance coverage. However, it’s crucial to carefully review the terms and conditions, including interest rates and repayment requirements, when utilizing these facilities to make informed financial decisions.
Policy Revival :
- Reviving a Lapsed Policy: Postal Life Insurance policies can be revived even after they have lapsed, subject to specific conditions. A lapsed policy is one where the policyholder has not paid the premiums as scheduled, leading to the loss of its active status.
Conditions for Revival: The conditions for reviving a lapsed policy are as follows:
- Less Than Three Years in Effect: If the policy has lapsed after six successive non-payments of premiums and has been in effect for less than three years, it can be revived.
- More Than Three Years in Effect: If the policy has lapsed after 12 successive non-payments of premiums and has been in effect for more than three years, it is eligible for revival.
Revival Process: To revive a lapsed policy, the policyholder is typically required to pay all outstanding premiums along with any interest or penalties that may have accrued during the lapse period. Additionally, the revival request may be subject to approval by the insurer, and in some cases, medical requirements or evidence of insurability may be necessary.
Reviving a lapsed policy can be a valuable option for policyholders to reinstate their coverage and continue enjoying the benefits provided by the policy. However, it’s essential to adhere to the specific conditions and requirements outlined by the insurance company and to contact the insurer or their designated agent promptly if a policy has lapsed and needs revival.
Duplicate Policy Document :
- Issuance of Duplicate Document: Postal Life Insurance offers the provision to issue a duplicate policy document to the policyholder in the following situations:
- Loss of the original policy document.
- Damage to the original document due to mutilation, burning, tearing, or other forms of damage, and the policyholder requests a duplicate copy.
This service ensures that policyholders can obtain a replacement policy document when the original is lost or compromised, helping them maintain proof of their insurance coverage.
Policy Conversion Options :
- Whole Life Assurance to Endowment Assurance: Policyholders have the option to convert a Whole Life Assurance policy into an Endowment Assurance Policy. This conversion allows for a change in the policy’s terms and benefits to better align with the policyholder’s evolving needs and financial goals.
- Endowment Assurance to Another Endowment Assurance Plan: Similarly, an Endowment Assurance Policy can be converted into another Endowment Assurance plan, subject to the regulations and guidelines established by the insurer. This flexibility allows policyholders to tailor their insurance coverage to suit their changing circumstances or preferences.
These conversion options provide policyholders with the flexibility to adapt their insurance plans as their financial objectives evolve over time, ensuring that their coverage remains aligned with their needs and goals. It’s advisable for policyholders to consult with the insurer or their designated agent for specific details and procedures regarding policy conversions.
Eligible Organizations for Postal Life Insurance Policies :
Employees of the following organizations are typically eligible to obtain a Postal Life Insurance (PLI) policy:
- Central and State Public Sector Enterprises
- Central and State Governments
- Government Aided Educational Institutions
- Universities
- Autonomous Bodies
- Local Bodies
- Cooperatives Societies
- Joint Ventures with a minimum of 10% Government or PSU stake
- Central and State Public Sector Enterprises
- Central and State Governments
- Government Aided Educational Institutions accredited by recognized bodies such as the All India Council of Technical Education, National Assessment and Accreditation Council, Medical Council of India, etc.
- Universities
- Autonomous Bodies
- Local Bodies
- Cooperatives Societies, including Credit Co-operative Societies
- Other Co-operative Societies registered with the Government under the Co-operative Societies Act, whether partly or fully funded by entities such as the State Government, Central Government, RBI, Nationalized Banks, State Bank of India (SBI), National Bank for Agricultural and Rural Development (NABARD), and more.
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