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PLI Interest Rates

Postal Life Insurance (PLI) was introduced in the year 1884 to encourage employees of the Central and the State Governments to get life insurance. As part of the initiative, 6 different kinds of insurance policies have been designed ranging from endowment-based plans to child life covers. Notably, policyholders can avail of loans against their PLI policies. The repayment of the principal amount involves an additional interest charged at 10% per annum.

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PLI Interest Rate and Loans

Postal Life Insurance policies offer policyholders the option to avail of loans against a percentage of the sum assured to finance urgent liquidity needs. In order for the loan to be approved, the life insurance policy has to be in force for a minimum of 3-4 years. Note that PLI policies can only be bought by Government, semi Government employees, and professionals.  

What Is The Postal Life Insurance (PLI) Interest Rate On Loans?

The interest rate charged for loans taken against PLI schemes is 10% per annum. Some of the important factors to note with regards to the payment of interest are:

  • The policyholder has to pay the interest on a half-yearly basis at the prescribed rate.

  • The interest on loans against PLI policies is calculated on a on six monthly basis. This payment has to be done by the due date. 

  • If it is not paid by the due date, the interest amount is added to the outstanding loan. The prescribed rate of interest shall ply on the total amount from then onwards. 

  • If the insurant defaults thrice on the half-yearly interest payment, the insurer shall surrender the policy.

  • Consequently, the applicable surrender value shall be used to pay off the outstanding loan and the unpaid interest. 

  • Once the policy is surrendered by the insurer after defaulting on payments, the benefits under the base postal life insurance policy shall stand void. 

Conditions To Apply For A Loan With PLI Schemes

Keep in mind the following terms and conditions before applying for a loan against your PLI schemes.

  • To avail of loans against your PLI endowment assurance or Yugal Suraksha policies, a minimum of 3 policy years has to be completed. 

  • Further, loans against PLI whole life policies and convertible whole life policies can only be availed on the completion of 4 policy years. 

  • The maximum amount of loan admissible under PLI schemes is 90% of the surrender value. This condition is applicable only if the loan amount is not less than Rs. 1000. 

  • You can apply for more than one loan on fulfilling prescribed criteria and is further subject to the discretion of the insurer. 

Availability Of Loan Facility Across Postal Life Insurance Policies

PLI Scheme Type Of Insurance Loan Facility
PLI Suraksha Whole Life Assurance Available after 4 policy years
PLI Suvidha Convertible Whole Life Assurance Available after 4 policy years
PLI Santosh Endowment Assurance Available after 3 policy years
PLI Yugal Suraksha Joint Life Assurance Available after 3 policy years
PLI Sumangal Anticipated Endowment Assurance Not Applicable
PLI Bal Jeevan Bima Children Policy Not Applicable


  • Are home loans available with postal life insurance schemes?

    No, home loans are not available. 
  • How is the postal life insurance interest rate calculated?

    The PLI post office interest rate is calculated at 10% per annum on a six monthly basis. 
  • How much loan can I avail of with a postal life insurance (PLI) scheme?

    The amount of loan that you are entitled to is prefixed at the time of policy inception per the applicable surrender value. The maximum amount of loan that can be availed with a PLI policy is 90% of the acquired surrender value. 
  • How to apply for loan on security of my PLI policy?

    You can visit the nearest post office to start the process. Note that there is a waiting period of 3-4 years before you can avail of a loan against your PLI policy. The application for the same is available on Annexure II, which you shall have to submit along with certain declarations.

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