Introduction

Postal Life Insurance (PLI) was introduced on 1st February 1884 with the express approval of the Secretary of State (for India) to Her Majesty, the Queen Empress of India. It was essentially a scheme of State Insurance mooted by the then Director General of Post Offices, Mr. F.R. Hogg in 1881 as a welfare scheme for the benefit of Postal employees and later extended to the employees of Telegraph department in 1888. In 1894, PLI extended insurance cover to female employees of P & T Department at a time when no other insurance company covered female lives. It is the oldest Life insurer in this country.

In the beginning, the upper limit of life insurance was only ₹ 4000/- which has now increased to ₹ 50 lacs (Rupees Fifty Lacs) and it will be effective as and when notified through a Gazette notification for all schemes combined - Endowment Assurance and Whole Life Assurance. Over the years, PLI has grown substantially from a few hundred policies in 1884 to more than 46 Lacs policies as on 31.03.2017. It now covers employees of Central and State Governments, Central and State Public Sector Undertakings, Universities, Government aided Educational institutions, Nationalized Banks, Local bodies, autonomous bodies, joint ventures having a minimum of 10% Govt./PSU stake, credit cooperative societies etc. PLI also extends the facility of insurance to the officers and staff of the Defence services and Paramilitary forces. Apart from single insurance policies, Postal Life Insurance also manages a Group Insurance scheme for the Extra Departmental Employees (Gramin Dak Sevaks) of the Department of Posts.

PLI is an exempted insurer under Section 118 (c) of the Insurance Act of 1938. It is also exempted under Section 44 (d) of LIC Act, 1956.

Insurance Plans in PLI

PLI offers the following six types of policies:

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

Salient Features of PLI policies

Whole Life Assurance (Suraksha)

This is a scheme where the assured amount with accrued bonus is payable to the insured either on attaining the age of 80 years, or to his/her legal representatives or assignees on death of the insured, whichever occurs earlier, provided the policy is in force on the date of claim.

Minimum & Maximum age at entry: 19-55 years
Minimum Sum Assured ₹ 20,000; Maximum ₹ 50 lac
Loan facility after 4 years
Surrender after 3 years
Last declared Bonus- ₹ 85/- per ₹ 1000 sum assured per year

2.Endowment Assurance (Santosh)

Under this scheme the proponent is given an assurance to the extent of the sum assured and accrued bonus till he/she attains the pre- determined age of maturity i.e 35,40,45,50,55,58 & 60 years of age.

In case of death of insurant, assignee, nominee or legal heir is paid full amount of sum assured with accrued bonus

Minimum & maximum age at entry: 19-55 years
Minimum sum assured ₹ 20,000; Maximum ₹ 50 lac
Loan facility after 3 years
Surrender after 3 years
Last declared Bonus – ₹ 58/- per ₹ 1000 sum assured per year

3.Convertible Whole Life Assurance (Suvidha)

This is a Whole Life Assurance Policy with the added feature of an option to convert to Endowment Assurance Policy at the end of five years of taking policy.

Assurance to the extent of sum assured with accrued bonus till attainment of maturity age
In case of death, assignee, nominee or legal heir paid full amount of sum assured with accrued bonus
Minimum age & Maximum age at entry: 19-50 years
Minimum sum assured ₹ 20,000; Maximum ₹ 50 lac
Loan facility after 4 years
Surrender after 3 years
Last declared Bonus- ₹ 85/- per ₹ 1000 per year (for WLA policy if not converted to Endowment Assurance)

Anticipated Endowment Assurance (Sumangal)

It is a Money Back Policy with maximum sum assured of ₹ 50 lacs, best suited to those who need periodical returns. Survival benefits are paid to the insurant periodically. Such payments will not be taken into consideration in the event of unexpected death of the insurant. In such cases, full sum assured with accrued bonus is payable to the assignee, nominee of legal heir.

Policy term: 15 years and 20 years
Minimum age 19 years; maximum age at entry 40 years for 20 years’ term policy & 45 years for 15 years’ term policy
Survival benefits paid periodically as under: -
15 years Policy- 20% each on completion of 6 years, 9 years & 12 years and 40% with accrued bonus on maturity
20 years Policy- 20% each on completion of 8 years, 12 years & 16 years and 40% with accrued bonus on maturity
Last declared bonus -₹ 53/- per ₹ 1000 sum assured per year

5.Joint Life Assurance (Yugal Suraksha)

It is a Joint Life Endowment Assurance in which one of the spouses should be eligible for PLI policies.

Life cover to both spouses to the extent of sum assured with accrued bonus.
Minimum sum assured ₹ 20,000; Maximum ₹ 50 lac
Minimum age & Maximum age at entry of spouses: 21-45 years
Maximum Age of the elder policy holder should not be more than 45 years & the couple should be between 21 years to 45 years.
Loan facility after 3 years
Loan after 3 years
Death benefits are paid to either of the survivors in the event of death of spouse or main policy holder
Last declared Bonus- ₹ 58/- per ₹ 1000 sum assured per year

Children Policy (Bal Jeevan Bima)

The salient features of this scheme are as under:

The scheme provides life insurance cover to children of policy holders.
Maximum two children of policy holder (parent) are eligible
Children between 5- 20 years of age are eligible
Maximum sum assured ₹ 3 lac or equal to the sum assured of the parent, whichever is less
Policy holder(parent) should not be over 45 years of age.
No premium to be paid on the Children Policy, on the death of policy holder (parent). Full sum assured and bonus accrued shall be paid on completion of term
Policy holder (parent) shall be responsible for payment of Children policy
Attract the rate of bonus applicable for Endowment policy (Santosh) i.e. last bonus rate is ₹ 58/- per ₹ 1000 sum assured per year.

Benefits of Postal Life Insurance (PLI)

PLI is the only insurer in the Indian Life Insurance market today which gives the higher return (bonus) with the low premium charged for any product in the market.

A PLI/RPLI policy holder may also get following facilities :-

Change of nomination.
The insurant can take loan by pledging his/her policy to Heads of the Circle on behalf of President of India, provided the policy has completed 3 years in case of Endowment Assurance and 4 years in case of Whole Life Assurance. The facility of assignment is also available.
Assignment of Policy to any Financial Institution for taking loan.
Revival of his/her lapsed policy. Policy lapses after 6 unpaid premia if it remained in force for less than 3 years and after 12 unpaid premia if it remained in force for more than 3 years.
Issue of Duplicate Policy Bond in case the original Policy Bond is lost, burnt or torn/mutilated.
Conversion from Whole Life Assurance -Gram Suraksha to Endowment -Gram Santosh Assurance and from Endowment Assurance -Gram Santosh to other Endowment Assurance-Gram Santosh with reduced sum assured or reduced term as per rules.

Features of PLI

PLI offers the following six types of policies:

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

PLI policies:
1. Whole Life Assurance (Suraksha)

Minimum & Maximum age at entry: 19-55 years
Minimum Sum Assured ₹ 20,000; Maximum ₹ 50 lac
Loan facility after 4 years
Surrender after 3 years
Not eligible for bonus if surrendered before 5 years
Can be converted into Endowment Assurance Policy upto 59 years of age of the insurant provided the date of conversion does not fall within one year of the date of cessation of premium payment or date of maturity.
Premium paying age can be opted for as 55,58 or 60 years
Proportionate bonus on reduced sum assured is paid if policy is surrendered
Last declared Bonus- ₹ 85/- per ₹ 1000 sum assured per year

Endowment Assurance (Santosh)

In case of death of insurant, assignee, nominee or legal heir is paid full amount of sum assured with accrued bonus
Minimum & maximum age at entry: 19-55 years
Minimum sum assured ₹ 20,000; Maximum ₹ 50 lac
Loan facility after 3 years
Surrender after 3 years
Not eligible for bonus if surrendered before completion of 5 years
Proportionate bonus on reduced sum assured is paid if policy is surrendered after 5 years
Last declared Bonus – ₹ 58/- per ₹ 1000 sum assured per year

Convertible Whole Life Assurance (Suvidha)

A Whole Life Assurance Policy with the added feature of an option to convert to Endowment Assurance Policy at the end of five years of taking policy.

Assurance to the extent of sum assured with accrued bonus till attainment of maturity age
In case of death, assignee, nominee or legal heir paid full amount of sum assured with accrued bonus
Minimum age & Maximum age at entry: 19-50 years
Can be converted into Endowment Assurance after 5 years not later than 6 years of taking policy. If not converted, policy will be treated as Whole Life Assurance
Minimum sum assured ₹ 20,000; Maximum ₹ 50 lac
Loan facility after 4 years
Surrender after 3 years
Not eligible for bonus if surrendered before completion of 5 years
Last declared Bonus- ₹ 85/- per ₹ 1000 per year (for WLA policy if not converted to Endowment Assurance)
On conversion, bonus of Endowment Assurance will be payable.

Anticipated Endowment Assurance (Sumangal)

It is a Money Back Policy under PLI with maximum sum assured of ₹ 50 lacs, best suited to those who need periodical returns. Survival benefits are paid to the insurant periodically. Such payments will not be taken into consideration in the event of unexpected death of the insurant. In such cases, full sum assured with accrued bonus is payable to the assignee, nominee of legal heir.

Policy term: 15 years and 20 years
Minimum age 19 years; maximum age at entry 40 years for 20 years’ term policy & 45 years for 15 years’ term policy
Survival benefits paid periodically as under: -
15 years Policy- 20% each on completion of 6 years, 9 years & 12 years and 40% with accrued bonus on maturity
20 years Policy- 20% each on completion of 8 years, 12 years & 16 years and 40% with accrued bonus on maturity
Last declared bonus -₹ 53/- per ₹ 1000 sum assured per year

Joint Life Assurance (Yugal Suraksha)

It is a Joint Life Endowment Assurance in which one of the spouses should be eligible for PLI policies.

Life cover to both spouses to the extent of sum assured with accrued bonus with a single premium
Minimum sum assured ₹ 20,000; Maximum ₹ 50 lac
Minimum age & Maximum age at entry of spouses: 21-45 years
Maximum Age of the elder policy holder should not be more than 45 years & the couple should be between 21 years to 45 years
Minimum term of policy 5 years and maximum 20 years
Loan facility after 3 years
Surrender after 3 years
Not eligible for bonus if surrendered before completion of 5 years
Proportionate bonus on reduced sum assured is paid if policy is surrendered
Death benefits are paid to either of the survivors in the event of death of spouse or main policy holder
Last declared Bonus- ₹ 58/- per ₹ 1000 sum assured per year

Children Policy (Bal Jeevan Bima)

The salient features of this scheme are as under:

The scheme provides life insurance cover to children of policy holders.
Maximum two children of policy holder (parent) are eligible
Children between 5- 20 years of age are eligible
Maximum sum assured ₹ 3 lac or equal to the sum assured of the parent, whichever is less
Policy holder (parent) should not be over 45 years of age.
No premium to be paid on the Children Policy, on the death of policy holder (parent). Full sum assured and bonus accrued shall be paid on completion of term
Policy holder (parent) shall be responsible for payment of Children policy
No loan admissible
Has facility for making it paid up, provided premiums are paid continuously for 5 years
Surrender facility is not available
No medical examination of child necessary. However, child should be healthy and risk shall start from day of acceptance of proposal
Attract the rate of bonus applicable for Endowment policy (Santosh) i.e. last bonus rate is ₹ 58/- per ₹ 1000 sum assured per year.

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