Postal Life Insurance

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Postal Life Insurance is the oldest life insurer in the country, having started operations in 1884 when the Secretary of State for India under the British Government (representing the then British Monarch, Queen Victoria) gave an express approval for its set up on February 1, 1884. Initially mooted in 1881as a welfare scheme to cover Her Majesty’s postal employees by the then Director General of Post Offices, F.R. Hogg, the scheme was soon extended to cover the employees of the Telegraph Department in 1888. Another feather in the cap for the fledgling organisation was extending the cover to female workers of the Posts and Telegraphs Department in 1894. This was at a time when no insurance company covered women.

Postal Life Insurance now covers a wide range of Central and State Government employees, and other people working in public sector institutions and organisations. As of now, Postal Life Insurance covers, among others, employees of:

  • Central and State Governments (including employees engaged or appointed on extendable contract basis)
  • Defence Services and Para Military Forces (including those holding short service or non-permanent commissions)
  • Local Bodies
  • Autonomous Bodies
  • Reserve Bank of India
  • Financial Institutions
  • Nationalized Banks
  • Scheduled Commercial Banks
  • Public Sector Undertakings
  • Department of Posts (Extra Departmental Agents or Gramin Dak Sevaks)
  • Government-aided Educational Institutions
  • Deemed Universities
  • Credit Co-operative Societies and other Co-operative Societies registered with the Government under the Co-operative Societies Act (partly or fully funded by Central or State Government, RBI, NABARD, nationalized banks and other notified institutions)
  • Council of Scientific and Industrial Research
  • The Medical Council of India, The Dental Council of India, The Nursing council of India and The Pharmacy Council of India

Postal Life Insurance has grown significantly from a few hundred policies in the 19th century to over than 6.4 million policies in the 21st (figure as of March 31, 2015). In its initial days, the upper limit of life insurance was Rs. 4,000. This figure now stands at Rs 50 lakh due to the erosion in the real value of money over the years.

Postal Life Insurance also covers Rural Postal Life Insurance that was set up on the recommendations of the Malhotra Committee (aka Official Committee for Reforms in the Insurance Sector) in 1993 to cover the rural sector in the country. Rural Postal Life Insurance leverages the vast network of post offices in the country to provide life insurance for the economically weaker rural population including women workers. There were more than 23.51 million Rural Postal Life Insurance policies as of March 31, 2015.

Postal Life Insurance Statistics

Year

Policies in Force (Units)

Sum Assured (Rs. Crore)

Fund Corpus (Rs. Crore)

2007-2008

35,50,084

31,459.00

12,081.71

2008-2009

38,41,539

38,403.00

14,152.59

2009-2010

42,83,302

51,209.91

16,656.02

2010-2011

46,86,245

64,077.00

19,801.91

2011-2012

50,06,060

76,591.33

23,010.55

2012-2013

52,19,326

88,896.96

26,131.34

2013-2014

54,06,093

1,02,276.05

32,716.26

2014-2015

64,61,413

1,30,745.00

37,571.77

 

Rural Postal Life Insurance Statistics

Year

Policies in Force (Units)

Sum Assured (Rs. Crore)

Fund Corpus (Rs. Crore)

2007-2008

61,67,928

41,846.09

3003.78

2008-2009

73,56,446

53,072.10

3994.36

2009-2010

99,25,103

59,572.59

5,524.69

2010-2011

1,22,03,345

66,132.23

6,607.79

2011-2012

1,35,47,355

69,754.17

9,141.43

2012-2013

1,46,64,650

75,154.06

11,388.20

2013-2014

1,50,14,314

79,466.46

13,352.01

2014-2015

2,35,14,055

1,05,204.79

14,968.67

 

Postal Life Insurance and Rural Postal Life Insurance Plans – Benefits and Features

Postal Life Insurance and Rural Postal Life Insurance have numerous benefits for policyholders. Some of them are provided below if you are wondering whether to go for any of these plans.

  • Postal Life Insurance and Rural Postal Life Insurance offer the lowest premium in the insurance market today, and the highest cover for such premium
  • Postal Life Insurance covers provide some of the highest bonus rates
  • Insured individuals can take a loan against the insurance plan if they pledge the policy to the Heads of the Circle or Region on behalf of President of India. The loan can be taken 3 years after buying an Endowment Assurance plan and 4 years in case of Whole Life Assurance cover
  • Postal Life Insurance policyholders can also assign their policy
  • They can also assign the policy to any financial institution for taking a loan
  • Insured individuals under Postal Life Insurance can convert their Whole Life Assurance plans to Endowment Assurance covers. They can also convert their Endowment Assurance plans to other Endowment Assurance policies
  • Policyholders can change their nominees at any time
  • Postal Life Insurance allows the insured to revise his or her lapsed policy at any time. The policy lapses if 6 premiums have not been paid for plans that are less than 3 years old, or 12 premiums have not been paid for covers more than 3 years old
  • Policyholders get duplicate certificates if the original policy is lost, burnt or destroyed for any reason
  • The Postal Life Insurance plans offer tax benefits under section 80C of the Income Tax Act
  • Policyholders can take more than one policy offered by Postal Life Insurance provided the total sum assured for each class of policies is not less than Rs. 20,000 and not more than Rs. 10 lakh
  • The policies must be taken in multiples of Rs. 10,000 after the minimum limit of Rs. 20,000

 

Postal Life Insurance and Rural Postal Life Insurance Plans – Eligibility and Features

 

Postal Life Insurance

Rural Postal Life Insurance

Eligible Persons

All employees of:

  • Central / State Governments (including people engaged / appointed on contract basis)
  • Defence Services and Para Military Forces
  • Local Bodies
  • Autonomous Bodies
  • Reserve Bank of India
  • Financial Institutions
  • Nationalized Banks
  • Scheduled Commercial Banks
  • Public Sector Undertakings
  • Department of Posts (Gramin Dak Sevaks)
  • Government-aided Educational Institutions
  • Deemed Universities
  • Credit Co-operative Societies and other Co-operative Societies registered with the Government under the Co-operative Societies Act

People living outside the municipal boundaries of any city or town

Non-eligible Persons

Employees in the private sector

People living within municipal boundaries of any city town

Entry Age of Person

  • 19-55 years for all plans except the Child Plan
  • Maximum age of insured under Children Policy (Bal Jeevan Bima)
  • is 45 years; the child’s age should be between 5 and 20 years
  • 19-55 years for all plans, except three mentioned below
  • 19-45 years for Anticipated Endowment Assurance (Grama Sumangal) and 10 Year Rural Postal Life Insurance Plan (Gram Priya)
  • Maximum age of insured under Children Policy (Bal Jeevan Bima) is 45 years; the child’s age should be between 5 and 20 years

Sum Assured

Rs. 20,000 (min) to Rs. 50 lakh (max)

Rs. 10,000 (min) to Rs. 10 lakh (max)

No. of Plans

There are six plans:

  • Whole Life Assurance (Suraksha)
  • Convertible Whole Life Assurance (Suvidha)
  • Endowment Assurance (Santosh)
  • Anticipated Endowment Assurance (Sumangal)
  • Joint Life Assurance (Yugal Suraksha)
  • Children Policy (Bal Jeevan Bima)

There are six plans:

  • Whole Life Assurance (Grama Suraksha)
  • Convertible Whole Life Assurance (Grama Suvidha)
  • Endowment Assurance (Grama Santosh)
  • Anticipated Endowment Assurance (Grama Sumangal)
  • 10 Year RPLI (Gram Priya)
  • Children Policy (Bal Jeevan Bima)

Premium Payment Frequency

Monthly

Monthly

 

 

Postal Life Insurance Plans

The organisation offers six traditional plans that range from whole life assurance to child cover. Let’s look at these plans in more detail.

Postal Life Insurance Plan – Whole Life Assurance Policy (Suraksha)

A whole life assurance scheme from Postal Life Insurance with the following features and benefits:

  • The Postal Life Insurance plan provides an insurance cover till the insured reaches the age of 80 years
  • Offers an assured amount and an accrued bonus to the policyholder after he or she attains the age of 80 years
  • The assured amount and bonus are paid to the nominees, legal heirs or assignees in case the unexpected happens and the policyholder expires during the tenure of the policy
  • Anyone who is an employee of the specified governments, armed forces, institutions and organisations, can apply for the policy provided they are over 19 years of age but below 55 years
  • A cover can start from as low as Rs. 20,000 and can go up to Rs. 50 lakh
  • Postal Life Insurance policyholders with cover more than Rs.1 lakh need to pass a medical examination by the prescribed medical authority
  • A Postal Life Insurance Suraksha policy can be converted into an Endowment Assurance Policy after one year of start of policy and before the insured reaches 57 years of age
  • Policyholders can apply for a loan after completion of 4 years of the plan if the plan has a surrender value of at least Rs. 1,000
  • The Postal Life Insurance plan has a lock in period of 3 years and can be surrendered anytime thereafter
  • Insured individuals are not eligible for bonuses if they surrender their plan or assign it before completion of 5 years. Bonus accrues on the reduced sum if policy is surrendered or assigned for a loan after 5 years
  • Insured persons have the option to make the policy a paid up plan if the cover is more than 3 years old

Postal Life Insurance Plan – Convertible Whole Life Assurance Policy (Suvidha)

A whole life assurance plan from Postal Life Insurance that can be converted into an endowment assurance plan. It has the following features and benefits:

  • The Postal Life Insurance plan can be converted into an Endowment Assurance plan after five and before six years of taking the policy
  • The age of the insured must be less than 55 years at the time of conversion
  • If the option to convert is not exercised within 6 years, then the policy will work as a Whole Life Assurance plan
  • The Postal Life Insurance insured receives the guaranteed sum assured and accrued bonuses on maturity if the conversion option is exercised. If the conversion option is not opted for, then the insured receives the guaranteed sum and bonuses on reaching the age of 80 years
  • In case of an unfortunate event if the insured passes away, then the nominees receive the sum assured and any accrued bonuses
  • Anyone who is an employee of the specified governments, armed forces, institutions and organisations, can apply for the policy provided they are over 19 years of age but below 55 years
  • The Postal Life Insurance policy offers a cover from Rs. 20,000 to Rs. 50 lakh
  • Policyholders with a cover of more than Rs.1 lakh need to pass a specified medical examination from the prescribed medical authorities
  • Loan facility is available against the Postal Life Insurance policy after a period of 3 years if the plan has acquired a minimum surrender value of Rs. 1,000
  • The Postal Life Insurance Suvidha plan has a lock-in period of 3 years after which the insured can opt to surrender the policy
  • Insured individuals are not eligible for bonuses if they surrender or assign the plan before 5 years. A proportionality reduced bonus accrues on the reduced sum if policy is surrendered or assigned for a loan after these 5 years
  • Insured can choose to turn the policy into a paid up plan if the policy is not less than 3 years old

Postal Life Insurance Plan – Endowment Assurance Policy (Santosh)

Postal Life Insurance offers an endowment assurance policy with the following features and benefits:

  • A traditional endowment plan that provides a guaranteed sum assured and accrued bonuses on maturity
  • Postal Life Insurance policyholders can choose to convert the plan into any other endowment plan
  • In the event of death of the insured, the sum assured and accrued bonuses are paid to the nominees, legal heirs or assignees
  • Anyone working in government departments and ministries, local bodies, defence services, para military forces, educational institutions, nationalised and commercial banks, and specified organisations, can apply for the policy
  • Postal Life Insurance policyholders must be over 19 years of age but less than 55 years old
  • A Santosh endowment policy offers a cover between Rs. 20,000 and Rs. 50 lakh
  • Medical checks are mandatory if the sum assured is more than Rs.1 lakh. The tests must be done by the prescribed medical authority and the insured must be declared fit before they become eligible for the cover
  • Loan facility is available after a period of 3 years from Postal Life Insurance if the plan has a minimum surrender value of Rs 1,000
  • The Postal Life Insurance endowment policy has a lock-in period of 3 years after which the insured can choose to surrender the cover
  • A Postal Life Insurance policy which is surrendered or assigned before 5 years is not eligible for bonuses. Plans are eligible for a proportionality reduced bonus amount if policy is surrendered or assigned for a loan
  • Give the insured the option to make the policy a paid up plan provided it is more than 3 years old

Postal Life Insurance Plan – Anticipated Endowment Assurance Policy (Sumangal)

The Sumangal policy is a money back plan from Postal Life Insurance with two plan options. It has the following features and benefits:

  • Postal Life Insurance offers two money back plan options under the larger Sumangal policy umbrella:
    • 15 Years Money Back Plan: The benefits under the Postal Life Insurance plan start accruing every 3 years after the 6th year. The insured receives amounts equal to 20% of the sum assured after 6 years, another 20% after 9 years, yet another 20% after 12 years and 40% of the sum assured and accrued bonus after 15 years.
    • 20 Years Money Back Plan: The benefits under the Postal Life Insurance plan start accruing every 4 years after the 8th year. The insured receives amounts equal to 20% of the sum assured after 8 years, another 20% after 12 years, yet another 20% after 16 years and 40% of the sum assured and accrued bonus after 20 years.
    • These payments do not reduce the policy sum assured and the nominees, legal heirs or assignees receive the full sum assured and the accrued bonuses if the unfortunate happens and the insured expires during the tenure of the policy
    • A Postal Life Insurance Sumangal policy is ideal for people looking for regular payments from their investments
    • The sum assured starts from Rs. 20,000 and goes up to Rs. 50 lakh
    • Applicants to the Postal Life Insurance policy must be between the ages of 19 and 55 years
    • Policyholders cannot take a loan against the policy

Postal Life Insurance Plan – Joint Life Assurance Plan (Yugal Suraksha)

A Yugal Suraksha Joint Life Assurance plan is meant for a couple where at least one of the spouses is eligible for a Postal Life Insurance scheme. Features and benefits include:

  • Anyone working in Central and State Government departments and ministries, local bodies, defence and para military forces, government-aided educational establishments and deemed universities, RBI, nationalised and commercial banks, and other specified organisations, can apply for the policy along with their spouse who may or may not be eligible on their own
  • Offers an insurance cover to the both the spouses under a single plan
  • The plan offers a guaranteed sum assured and accrued bonuses on maturity
  • Policyholders can choose to convert the plan into any other endowment plan
  • Policyholders must be over 19 years of age but less than 55 years old
  • The plan offers a cover ranging from Rs. 20,000 to Rs. 50 lakh
  • Medical checks are mandatory if the sum assured is more than Rs. 1 lakh
  • Loan facility is available after a period of 3 years from Postal Life Insurance if the plan has a minimum surrender value of Rs 1,000
  • The endowment policy has a lock-in period of 3 years after which the insured can choose to surrender the cover
  • A policy which is surrendered or assigned before 5 years is not eligible for bonuses. Plans are eligible for a proportionality reduced bonus amount if policy is surrendered or assigned for a loan
  • The insured couple can opt to turn the policy into a paid up plan provided the policy is not less than 3 years old

Postal Life Insurance Plan – Children Policy (Bal Jeevan Bima)

Meant to insure the children of individuals who have a Postal Life Insurance plan, the features and benefits of this policy include:

  • A Bal Jeevan Bima cover provides insurance to a maximum of two children in the family
  • The policy is taken in the name of the parent who has a Postal Life Insurance cover
  • The children must be between the ages of 5 and 20 years and the primary insured (i.e. the parent) must be less than 45 years
  • The sum assured is limited to the maximum of Rs. 3 lakh or the sum assured of the primary insured individual
  • Maturity benefits include the sum assured and any accrued bonuses
  • The bonus rates will be the same as those declared for endowment policies
  • No premium is required to be paid in the event of death of the insured
  • In the event of death of policyholder, the sum assured and accrued bonuses are payable to the children after the term of the plan. In case of death of a child, the sum assured and accrued bonuses become payable immediately
  • Loan facility is not available under the plan
  • The insured can opt to make the policy a paid up plan provided the premium have been paid continuously for 5 years

Medical examination is not required for children under this plan

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