Postal Life Insurance (PLI) - Money Back Policy

What is Postal Life Insurance (PLI)?

Postal Life Insurance (PLI), offered by the Government of India, is one of the oldest life insurance schemes in the country, dating back to 1884. Initially meant for postal department employees, it now covers a wider range of people, including:

• Employees of Central and State Governments.

• Defence and Paramilitary Services personnel.

• Public Sector Undertakings and Banks.

• Educational Institutions and Local Bodies.

• Professionals such as doctors, engineers, chartered accountants, MBAs, lawyers, etc.

• Employees of companies listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).

PLI offers a variety of life insurance plans, typically known for their low premiums and attractive returns through bonuses. These plans can provide coverage up to Rs. 50 lakhs. 

There are whole life insurance plans where the benefit is paid on death or on reaching a certain age, endowment plans that mature after a fixed term, and even child insurance plans. Some plans are specifically designed for the rural population.

Features of Postal Life Insurance (PLI)

The following list will help you to learn the key features of a Post Life Insurance Scheme:

• Affordable Premiums: Offers low and competitive premium rates compared to other insurance policies.

• Flexible Premium Payment: Options to pay premiums monthly, quarterly, half-yearly, or annually.

• Loan Facility: Allows policyholders to take loans against their PLI policies after a specified period.

• Bonus Addition: Policies accrue bonuses declared by the government, enhancing the policy's value.

• Policy Conversion: Flexibility to convert one type of policy to another, like from Whole Life Assurance to Endowment Assurance.

• Nomination Facility: Policyholders can nominate beneficiaries to receive the policy benefits.

• Surrender Value: Option to surrender the policy after a specified period, getting a portion of the premiums paid.

• Tax Benefits: Premiums paid are eligible for tax deductions under Section 80C of the Income Tax Act.

• Maturity Benefit: Assured sum along with accumulated bonuses is paid on policy maturity.

• Death Benefit: In the event of the policyholder's death, the sum assured plus bonuses is paid to the nominee.

• Rebate on Premiums: Offers a rebate for policies with high sums assured and for advance payment of premiums.

• Online Services: Availability of online facilities for premium payment and policy management.

PLI Money Back Policy Calculator

The PLI Money Back Policy Calculator helps you estimate returns for Postal Life Insurance policies that offer periodic payouts. You need to insert the sum assured, policy term, premium amount, and other policy-specific factors in the money back plan calculator.

This calculator is designed to give you an approximate idea of the returns you can expect based on your inputs.

Comparison Between

Fixed Deposits, Guaranteed Return Plans & Debt Mutual Fund

Guaranteed Return Plans, Fixed Deposits &
Debt Mutual Fund

Guaranteed Return Plans

Returns Before Tax

7.5% ^(TAX-FREE)

Returns After Tax

7.5%

Guaranteed Returns

Yes

Life Cover

Yes

Tax on Profit

Tax Free*

Risk

No Risk

Still Better than FD’s and Debt Mutual Fund

Fixed Deposits

Returns Before Tax

7% ^(TAXABLE)

Returns After Tax

4.8%

Guaranteed Returns

Yes

Life Cover

No

Tax on Profit

Taxable

Risk

Low Risk

Debt Mutual Fund

Returns Before Tax

8% ^(TAXABLE)

Returns After Tax

5.5%

Guaranteed Returns

No

Life Cover

No

Tax on Profit

Taxable

Risk

High Risk

VIEW PLANS

*For annual premium upto ₹5 Lacs

Types of PLI Schemes

PLI offers six different policy types to choose from, allowing you to pick the one that best suits your goals:

Other Key Features of the PLI Schemes:

1. Whole Life Assurance (Suraksha)

   The Whole Life Assurance – Suraksha PLI Scheme guarantees the assured amount plus accrued bonuses, payable either when the insured turns 80 years old or to their legal representatives or assignees upon the insured's death, whichever happens first, provided the policy is active at the time of claim.

2. Convertible Whole Life Assurance (Suvidha)

   Convertible Whole Life Assurance (Suvidha) is a policy that offers lifelong coverage with the flexibility to convert into an Endowment Assurance Policy after five years.

3. Endowment Assurance (Santosh)

   Endowment Assurance (Santosh) provides assurance up to the sum assured plus accrued bonuses until the insured reaches a chosen maturity age: 35, 40, 45, 50, 55, 58, or 60 years.

4. Anticipated Endowment Assurance (Sumangal)

   Anticipated Endowment Assurance (Sumangal) is a Money Back Policy offering a maximum sum assured of ₹50 lakh, ideal for those seeking periodic returns. It provides survival benefits periodically to the insured. In the unfortunate event of the insured's unexpected death, the full sum assured along with accrued bonuses is payable to the nominee or legal heir.

5. Joint Life Assurance (Yugal Suraksha)

   Joint Life Assurance (Yugal Suraksha) is a Joint Life Endowment Assurance designed for couples where at least one spouse is eligible for PLI policies. It provides life cover to both spouses with a single premium, including sum assured and accrued bonuses.

6. Children Policy (Bal Jeevan Bima)

   The Children Policy (Bal Jeevan Bima) provides life insurance cover to a maximum of your two children. No premium is required to be paid on the Children Policy if the Parent passes away. The full sum assured and accrued bonuses are paid upon completion of the term.

Eligibility Criteria to Buy a Postal Life Insurance (PLI)

There are two main eligibility criteria for buying a Postal Life Insurance (PLI) policy in India:

1. Age:

   • Minimum age: 19 years

   • Maximum age: 55 years (though there may be variations depending on the specific PLI scheme)

2. Occupation:

   PLI schemes are primarily targeted towards people employed in specific sectors. You are eligible if you work for any of the following:

   • Defense Services personnel

   • Para Military Forces members

   • Central Government employees

   • Local Bodies staff

   • Reserve Bank of India (RBI) employees

   • Government-aided Educational Institutions staff

   • Public Sector Undertakings employees

   • Nationalized Banks employees

   • Financial Institutions staff

   • Autonomous Bodies employees

   • Contractual employees of Central/ State Governments (with extendable contracts)

   • Employees of all scheduled Commercial Banks

   • Extra Departmental Agents in Department of Posts

   • Employees of accredited educational institutes (e.g., AICTE, NAAC, MCI accredited)

   • Employees of recognized cooperative societies under the Cooperative Societies Act

Annual PLI Bonus Rates

Postal Life Insurance (PLI) bonus rates are declared annually. The bonus rate you receive depends on the specific policy you hold.

Terminal Bonus in PLI Schemes

In addition to the yearly bonuses, PLI also offers a terminal bonus of ₹ 20 per ₹ 10,000 sum assured, subject to a maximum of ₹ 1000, for Endowment Assurance and Whole Life Insurance policies with a term of 20 years or more

Benefits of Postal Life Insurance Investment

Some of the main benefits of investing in a PLI Scheme are as follows: 

• Government-backed Security: PLI is backed by the Government of India, ensuring reliability and security.

• Affordable Premiums: Offers affordable premium rates suitable for various income levels.

• Flexible Policy Options: Various policy options cater to different needs, such as endowment, whole life, and children's plans.

• High Claim Settlement Ratio: Known for a high claim settlement ratio, ensuring timely payouts.

• Long-term Savings: Helps in disciplined savings and wealth accumulation over the long term.