If you are a government employee, then as a significant perk; you can opt for postal life insurance (PLI). The PLI covers several departments of the State and Central governments, financial institutions nationalized banks and public sector undertakings among others.Read more
So if you are a government employee you can avail insurance at much lower rates compared to those of private insurance companies.
Your premium is decided on age at which you buy the policy and remains same, throughout your life
Premiums can increase between 4-8% each year after your Birthday
Your policy application could be rejected or premiums increase by 50-100%, if you develop a lifestyle disease
Postal Life Insurance was initiated in 1884 is currently handled by the Department of Posts under the Government of India. What was initially started as a way of ensuring welfare for government employees has grown by leaps and bounds now.
What are the various policies offered by PLI?
Postal life insurance offers seven plain vanilla insurance plans which include:
As per this plan, the insurance amount along with its bonus is to be paid to the nominee or legal heir following death of the insured person.
This insurance policy insures both the spouses under one cover. The PLI is extended to the family member as well, and if either of the spouses is a government employee, this policy can be availed. Another perk of this policy is that it requires the payment of only a single premium for both.
As per endowment policy, the sum assured along with the bonus is liable for payment at the pre-determined age of maturity. However, in the event of the policy holder’s death, the nominee receives the sum assured.
Convertible Whole Life Assurance (SUVIDHA)
This insurance policy has the provision of being changed into an endowment assurance plan after the policy completes five years.
Anticipated Endowment Assurance (SUMANGAL):
This insurance policy offers periodical returns and is a money-back policy. Also, the maximum sum assured in this policy is Rs.5 lakhs.
This is an extended policy for the children of government employees. This policy can be taken on either the sum assured of the policy holder or Rs.1 lakh, whichever is lower.
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Insurance for the Disabled
The PLI extends insurance to disabled persons upon a medical examination, which helps decide on the premium to be paid.
What are the Benefits of Availing PLI?
Although these insurance policies are yet to gain prominence, they offer several benefits which make them attractive. Some are listed below:
PLI investments are liable for tax benefits like other life insurance policies
These provide coverage with immediate effect, upon acceptance
They provide the ease of transfer from anywhere across India
Conversion is easy from a whole life assurance to endowment assurance
Loans can be availed on the endowment assurance policy following the completion of three years of the plan
The fine for a delay in a month’s premium is Re 1 upon every Rs. 100 of the sum assured.
*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
Things to Remember
Although PLI is gaining prominence gradually, it is still not available at all post offices in India. Only select post offices which house a PLI division are eligible to offer this plan. Also, you cannot purchase PLI online so you have to visit the post office to invest in a policy.
The minimum age for PLI is 18 years and the maximum age is 55 years
The maximum sum assured is approximately is Rs.10 lakh
Government employees can continue holding on to their policies even after they leave their jobs
The premiums can be paid on a monthly, half-yearly or annual basis
The policies can be surrendered prematurely as well. The endowment assurance policy can be returned after the completion of 3 years, while the whole life assurance policy can be returned after the completion of 4 years.
So, if you are a government employee, PLI is an extremely attractive and affordable plan, which you can opt for to cater to your investment needs.
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