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Postal Life Insurance

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Postal Life Insurance (PLI) was initiated as a welfare scheme for postal employees. This was later extended to benefit the Department of Telegraph in 1888 and then female employees as well.

PLI is one of the oldest life insurance providers in India. Initially, the upper limit of the life insurance policy was only Rs. 4000, but now it is providing coverage up to 50 lakhs. Over the years, Postal Life Insurance has grown from offering a few hundred policies to more than 46 lakhs policies.

What is the Postal Life Insurance Plan?

Postal Life Insurance offers reliable life insurance coverage with high returns on the premium paid. The maximum sum assured under this policy is Rs. 50 lakhs. This policy is an offering from the Government of India, aimed at the Central and State Government employees, public sector employees, government-aided institutions, educational institutions, and other autonomous bodies. PLI also manages a group insurance scheme for the postal department.

Why Should you choose the Postal Life Insurance plan?

Investment in Postal Life Insurance Plan is advantageous for various reasons.

PLI schemes offer several benefits to applicants and one of the most popular plans in the country due to the flexibility offered. The policy has a wide reach to individuals both in urban and rural sectors. Postal life insurance policies offer better returns than its competitors.

For instance, Postal Life Insurance has announced a bonus of Rs. 70 per Rs. 1000 sum assured for its endowment plans. The insured gets the sum assured plus accrued bonus after the policy period ends irrespective of its maturity. In contrast, competitive insurance providers offer not more than Rs. 50 as a bonus on the sum assured.

Any investment in Postal Life Insurance gets all the tax benefits. The premiums and the returns are exempt from tax under section 80C of the Income Tax Act.

Once the policyholder chooses the required plan, he can pay the premium conveniently at any post office near him. Some government departments even have the facility of deducting premium from the salary of the insured.

Postal Life Insurance is an ideal option if an individual is looking for plain life insurance cover without any added frills or features.

Types of Postal Life Insurance Plans

Postal Life Insurance offers 6 types of insurance policies:

  • Whole Life Insurance
  • Endowment Insurance
  • Convertible Whole Life Insurance
  • Anticipated Endowment Insurance
  • Joint Life Assurance
  • Children’s Policy
  • Whole Life Insurance

    Overview: Sum assured plus accrued bonus is paid out to the nominee, legal heir, or assignee after the demise of the insured.

    Eligibility: Minimum entry age is 19 years, Maximum is 55 years.

    Conversion: Conversion of a Whole Life Insurance to an Endowment Insurance Policy after one policy year or before the insured turns 57 is possible.

    Sum Assured: Minimum: Rs 20,000, Maximum: Rs 50 Lakh

    Loan Feature: Loan can be availed against the policy after 4 years policy period is complete.

    Surrender Feature: Policy can be surrendered after 3 years of the policy period. If the policy is assigned or loan is availed before 5 years of the policy, the policyholder will not be eligible to receive the bonus. Otherwise, the apportioned bonus calculated on the reduced amount can be accrued in case the policy is surrendered or loan is availed.

    Medical Test: Medical examination is mandatory for this policy.

    Premiums: Postal Life insurance Premium amount is variable, calculated based on the age of entry, policy maturity, and so on.

  • Endowment Insurance

    Overview: Sum assured plus accrued bonus is paid when the insured attains a pre-determined age of maturity. Sum assured plus accrued bonus is paid to the nominee, legal heir, or assignee after the demise of the insured.

    Eligibility: Minimum entry age is 19 years, Maximum is 50 years

    Conversion: The policy can be converted to an endowment assurance policy subject to terms and conditions.

    Sum Assured: Minimum: Rs. 20,000, Maximum: Rs. 5 Lakh

    Loan Feature: The loan can be availed against the policy after 4 years of the policy period is complete.

    Surrender Feature: Policy can be surrendered after 3 years of the policy period. If the policy is assigned or loan is availed before 5 years of the policy, the policyholder will not be eligible to receive the bonus. Otherwise, the apportioned bonus calculated on the reduced amount can be accrued in case the policy is surrendered or loan is availed. 

    Medical Test: Medical examination is mandatory for this policy.

    Premiums: The premium amount is variable, calculated based on the age of entry, policy maturity, and so on.

  • Convertible Whole Life Insurance

    Overview: Sum assured plus accrued bonus is paid when the insured attains a pre-determined age of maturity. The sum assured plus accrued bonus is paid to the nominee, legal heir, or assignee after the demise of the insured.

    Eligibility: Minimum entry age is 19 years, Maximum is 55 years.

    Conversion: The policy can be converted to an endowment assurance policy after 5 years of policy but before 55 years. If the conversion option is not availed, the policy will automatically convert to Whole Life Insurance.

    Sum Assured: Minimum: Rs 20,000, Maximum: Rs 50 Lakh

    Loan Feature: The loan can be availed against the policy after 3 years of the policy period. 

    Surrender Feature: The policy can be surrendered after 3 years of the policy period. If the policy is assigned or loan is availed before 5 years of the policy, the policyholder will not be eligible to receive the bonus. Otherwise, the apportioned bonus calculated on the reduced amount can be accrued in case the policy is surrendered or loan is availed. 

    Medical Test: Medical examination is mandatory for this policy 

    Premiums: The premium amount is variable, calculated based on the age of entry, policy maturity, and so on.

  • Anticipated Endowment Insurance

    Overview: This is a money-back policy with a maximum sum assured of 50 lakhs ideal for those who are looking for periodic returns. Survival benefits are paid to the insured periodically, and in case of his unexpected death, the sum assured plus bonus is paid to the nominee, assignee, or heir.

    Policy Term: 15 years and 20 years

    Sum assured: Maximum is Rs. 50 Lakh.

    Eligibility: The minimum entry age is 19 years, and the maximum is 40 years for a 15-year term policy and 45 years for a 20-year term policy.

    Benefits: For a 15-year term policy:  20% of sum assured is paid post 6 years, 9 years, or 12 years of the policy. 40% of sum assured plus bonus is paid after the 15-year term.

    For 20-year term policy:  20% of sum assured is paid post 8 years, 12 years, or 16 years of the policy. 40% of sum assured plus bonus is paid after the 20-year term. 

    Medical Test: Medical examination is mandatory for this policy 

    Premiums: Premium amount is variable, calculated based on the age of entry, policy maturity, and so on.

  • Joint Life Endowment Insurance

    Overview: This policy is best suited for spouses if one of them is eligible for Postal Life Insurance. Both spouses are covered for sum assured plus accrued bonuses under one premium.  

    Eligibility: The minimum entry age is 19 years, Maximum is 55 years. 

    Conversion: The policy can be converted to any Endowment Assurance Policy if the terms and conditions of PLI are met.

    Sum Assured: Minimum: Rs 20,000, Maximum: Rs 50 Lakh.

    Loan Feature: Loan can be availed after 3 years of policy completion.

    Surrender Feature: The policy can be surrendered after 3 years of the policy period. If the policy is assigned or loan is availed before 5 years of the policy, the policyholder will not be eligible to receive the bonus. Otherwise, the apportioned bonus calculated on the reduced amount can be accrued in case the policy is surrendered or loan is availed. 

    Medical Feature: Medical examination is mandatory for this policy 

    Premiums: Premium amount is variable, calculated based on the age of entry, policy maturity, and so on.

  • Children’s Policy

    Overview: This PIL policy is for the policyholder’s children. A maximum of 2 children is eligible to be covered under this policy. 

    Eligibility: Main policyholder: Maximum- 45 years, Children: Minimum: 5 years

    Sum Assured: Maximum: Rs 3 Lakh or an amount equivalent to the policyholder’s sum assured, whichever is less. The policy bonus is calculated at the rate allowed for endowment plans, subject to the POIF rules.

    Loan Feature: Loan facility is not available under this policy.

    Medical Feature: Medical examination not mandatory for this policy. 

    Premiums: The main policyholder is responsible for premium payments.  In the event of the death of the main policyholder, no premium is payable. Sum assured plus bonus accrued is paid after completion of the policy term.

Types of Plans in Rural Postal Life Insurance

Postal Life Insurance offers 6 types of insurance policies:

  • Gram Suraksha - Whole Life Insurance
  • Gram Santosh - Endowment Insurance
  • Gram Suvidha - Convertible Whole Life Insurance
  • Gram Sumangal - Anticipated Endowment Insurance
  • Gram Priya - 10-year RPLI
  • Bal Jeevan Bima - Children’s Policy

The features of the RPLI plans are given below:

Policy Benefits Entry Age Sum Assured Loan Facility Surrender Value Bonus
Gram Suraksha The assured amount along with accrued bonus is paid to the insured or his legal heir upon the demise Minimum: 19 years Maximum: 55 years Minimum: Rs. 10,000 Maximum: Rs. 10 lakh Loan facility after 4 years of the policy period Surrender facility after 3 years of the policy period Last declared is Rs. 65 per Rs. 1000 sum assured.
Gram Santosh Insured receives sum assured plus accrued bonus till he attends age of maturity Minimum: 19 years Maximum: 55 years Minimum: Rs. 10,000 Maximum: Rs. 10 lakh Loan facility after 3 years of the policy period Surrender facility after 3 years of the policy period Last declared is Rs. 50 per Rs. 1000 sum assured
Gram Suvidha A Whole Life Assurance policy with an added benefit of conversion to any Endowment Assurance policy Minimum: 19 years Maximum: 45 years Minimum: Rs. 10,000 Maximum: Rs. 10 lakh Loan facility after 4 years of the policy period Surrender facility after 3 years of the policy period Last declared is Rs. 65 per Rs. 1000 sum assured
Gram Sumangal A money-back policy with periodic returns. Survival benefits are paid out to the insured periodically. In case of his death, the sum assured plus accrued bonus will be paid to the legal nominee or heir. 15-year policy term: Minimum: 6 years Maximum: 12 years 20-year policy term: Minimum: 8 years Maximum:  16 years 15-year policy: 20% of sum assured on completion of 6, 9 or 12 years 40% with accrued bonus on maturity. 20-year policy: 20% of sum assured on completion of 8, 12 or 16 years 40% with accrued bonus on maturity. NA NA Last declared is Rs. 47 per Rs. 1000 sum assured
Gram Priya Short-term money back policy mainly for the rural population. Insured given coverage for 10 years upto the amount of sum assured. Minimum: 20 years Maximum: 45 years Minimum: Rs. 10,000 Maximum: Rs. 10 lakh NA NA Last declared is Rs. 47 per Rs. 1000 sum assured
Bal Jeevan Bima This policy provides life coverage to the children of policyholders. A maximum of 2 children is covered. No premium is payable upon the death of the policyholder. Sum assured plus bonus is paid on term completion. Minimum for children: 5 years Maximum for children: 20 years Minimum for policyholder: 45 years Maximum: 1 lakh or an amount equal to the sum assured whichever is lower. NA NA Last declared is Rs. 50 per Rs. 1000 sum assured

Features and Benefits of the Postal Life Insurance plan

  • Features of the Postal Life Insurance Plan are 

    • In the Postal Life Insurance plan, the policyholder can nominate a beneficiary and make changes to the nomination
    • The loan facility is available against the Postal Life Insurance Policy. The plan can be made as collateral against a loan once the policy becomes 3 years if it is an Endowment Policy and 4 years old if it is a Whole Life Insurance policy. Policy assignment is also allowed under this scheme.
    • A policyholder can renew or revive a lapsed policy under the following circumstances
    • If the policy has lapsed after 6 continuous non-payment of premium within 3 years of policy purchase
    • If the policy has lapsed after 12 continuous non-payment of premium within 3 years of policy purchase
    • If the policyholder has lost or misplaced the original policy document, a duplicate document will be issued to him
    • The Whole Life Insurance policy can be converted to any Endowment Assurance plan within the guidelines of the insurer
  • Some of the key benefits of the Postal Insurance Plan are

    • The policyholder can avail income tax exemption on the premium and sum assured paid under Section 80 and Section 88 of the Income Tax Act
    • The premium amount payable for the sum assured for this policy is much lesser than any other life insurance provider
    • Additional benefits offered under PIL are Loan, Conversion, Assignment, and Paid-up Value Surrender options
    • The Postal Life Insurance policy can be transferred to any other policy within the circle inside the country at no extra cost
    • There is a passbook facility available to track policy premium payment, loan transaction and so on
    • For any advance premium payment for a PIL policy for 6 months, a discount of 1% on policy value can be availed
    • For any advance premium payment for a PIL policy for 12 months, a discount of 2% on policy value can be availed
    • There is a nomination facility available for all policies of Postal Life Insurance
    • The claims process is quick and easy for Postal Life Insurance policies due to their centralized accounting and management facility

Documents Required to apply for the Postal Life Insurance plan

The documents required to apply for a Postal Life Insurance Policy are:

  • Proposal Form
  • Document for Age proof such as Aadhar card, Birth certificate, School certificate, Passport, Driving license, PAN card or Driver’s license
  • Document for Address proof such as Aadhar card, Voter Id, passport, Driver license, Ration card, utility bill
  • Document for ID proof (self-attested) such as Employer photo ID card, Professional degree or diploma
  • Document for marriage proof (self-attested for Yugal Suraksha policy) such as marriage certificate, affidavit or any legal certificate
  • Document for income proof such as Payslip, Bank statement or Income tax return

For PLI policies over Rs. 20 lakh as the sum assured, apart from the above documents, medical reports, and results of medical examinations also need to be filed. 

For Rural Postal Life Insurance (RPLI) policy, apart from the above documents, non-standard documents such as Elder’s declaration, medical examiner’s approximate age certificate, or declaration attested by a panchayat member will also work as age proof.

Inclusions and Exclusions of the Postal Life Insurance plan 

The Postal Life Insurance plan provides life insurance cover to all applicants who satisfy the eligibility criteria of working in the approved government or semi-government organizations and educational institutions. 

The Rural Postal Life Insurance plan provides life insurance cover to all individuals male and female, who reside permanently in rural areas and are normally residents of India, excluding foreigners and non-resident Indians, provided they have attained majority.

Eligibility Criteria to apply for the Postal Life Insurance plan

Employees of the following organizations are eligible to apply for Postal Life Insurance Plan:

  • State Government
  • Central Government
  • Defence Services
  • Local Bodies
  • Para Military Forces
  • Government aided educational institutions
  • Nationalized banks
  • Financial Institutions
  • Autonomous Bodies
  • Employees of Scheduled Commercial banks
  • Extra Departmental Agents in Department of Posts
  • Employees Appointed or Engaged by Central or State Government on a contract basis where it is extendable
  • Those individuals employed in credit co-operative societies and other co-operative societies registered with government under the Co-operative Societies Act. These may be partly or wholly funded by Central or State government, nationalized banks, NABARD, SBI and so on
  • Staff (teaching or non-teaching) serving private educational institutions such as schools, colleges, affiliated to recognized boards such as CBSE, ICSE, State Boards of Central and State government of India
  • The staff of deemed universities and educational bodies affiliated to recognized bodies such as the National Assessment and Accreditation Council, Medical Council of India, All India Council of Technical Education, etc.
  • Medical professionals such as doctors, including those pursuing a post-graduate degree through any private or government hospitals, resident doctors working on a temporary or permanent basis in private or government hospitals
  • Engineers, including those pursuing Masters’ or Post Graduate Degrees after clearing the GATE entrance exam, Chartered Accountants registered with the Institute of Chartered Accountants of India, Management Consultants, Lawyers registered with Bar Council of India, Architects, Bankers with nationalized banks and associated bodies, regional and rural banks, foreign banks, and Scheduled Commercial banks including Private Sector Banks, etc.
  • Employees of all companies that are listed in NSE (national stock exchange) and BSE(Bombay stock exchange) in the areas of IT, Finance, Banking, Energy, Telecom, Healthcare/Pharma, Telecom, Infrastructure and so on. All employees who are eligible for Provident Fund, Gratuity, and whose leave records are maintained by the organization are eligible

Claim Process of the Postal Life Insurance plan

The policyholder must register the claim with the CPC (Claims Processing Centre) by submitting essential documents such as original policy document, premium payment receipts, and loan repayment record (if any). 

After these documents are verified for authenticity, they will be approved or rejected. In the case of claim approval, the amount will be settled through the registered post office.

Renewal Process of the Postal Life Insurance plan

If the premium is not paid for 6 months for a 3-year old policy and 12 months for a policy over 3 years, the insurance policy lapses and becomes void. It needs to be revived to become active again. Policy renewal can be done twice during the entire policy term. The policy can be revived any time within a year before maturity.

To renew a policy that is lapsed, all unpaid premium amounts must be paid off, including interest. There may be a penalty applicable either on the revival amount or on the period for which the policy was inactive.

How to Buy the Postal Life Insurance plan?

The steps for purchasing an online Postal Life Insurance policy are given below:

  • Visit the official website of Postal Life Insurance
  • There will be a form asking for personal details that must be accurately filled out
  • The individual must compare policies online and choose the one right for him. The premium calculator will show the premium amount due
  • The completed form must be downloaded, printed and taken to the nearest post office along with the supporting documents

The customer must visit the nearest post office to update his latest mobile number and address for records.

After policy purchase, for any transaction such as premium payment or nominee addition, a customer id is mandatory. This customer id can be generated from the customer portal, after which the link for resetting the password will be sent to the registered email address. The customer can use this id and password for availing PLI and RPLI services.

Customer Guidelines

A Postal Life Insurance policy is a long-term contract between the customer and the postal department. It has several features and documents that need to be explained.

  • Policy Bond

    The policy bond is the most important document in the postal life insurance policy portfolio. This document will be necessary for all services from claim settlement, reinstating policy, nomination, and so on. This document, once received, must be kept in a safe place, and a trusted person must be informed of its whereabouts in case it has to be accessed in the absence of the policyholder.

  • Policy Number

    A policy number is a 13-digit number in the policy bond. This is a unique number that acts as a policy identification number. For any correspondence related to the policy, this number must be quoted. IT is advisable to note down the policy number in a diary for safekeeping. While postal life insurance premium is paid through cheque, the policy number must be written on the back of the cheque.

  • Premium Payment

    Paying the policy premium is the most important activity to be done to keep the Postal Life Insurance policy alive. The policyholder must be clear on the time and amount of payment to be done. A lapse on premium payment will lead to lapse of policy and stoppage of life cover. Delay in payment will incur a fine from the insured,  

    The postal life insurance premium is generally due on the 1st day of each month, but the grace period is normally allowed until the last day of the month. 

    The policy bond will have information regarding premium due date, policy commencement date, mode of premium, etc. The mode of premium payment will be quarterly, monthly, half-yearly, yearly, and so on. This information can be used to chart out a payment schedule for your reference. It is vital to note down premium amounts and dates of payments to avoid confusion.

    The postal department will send a notice for premium payment, but it is advisable not to wait for the notice to pay the premium within the stipulated time.

    In some cases, employers directly deduct the premium amount from the salary of the policyholder. In these cases, the insured must check from time to time if the employer is on track with payments. Any lapse or delay in payment, even for a brief period, can result in loss of life insurance cover. The salary slip must be checked regularly to ensure that the premium amount is being deducted on time.

    If the services of the employee are transferred, the location of the new PLI office associated with the new company must be found out, and the old PLI office must be intimated about the transfer. Contact details must be current and updated so that the PLI office can contact the insured regarding the transfer of services.

    There are several choices to pay the Postal Life Insurance premium. The policyholder can come either to the nearest post office, pay online from the convenience of their home, or send the payment through a trusted agent.

  • Mobile number and Email

    The customer will need to visit the nearest post office to update his email id and mobile number into the system. A request form must be submitted to initiate any change process.

  • Customer ID

    Customer Id generation is a pre-requisite to carry out any transaction related to Postal Life Insurance and Rural Postal Life Insurance policies. Real-time customer id generation can be done in the ‘Customer Portal’ of the official website. Before generating the customer id, customers need to ensure that the latest email id and mobile number are updated in the system for respective policies. Once the customer’s contact information is updated, he will be able to register on the portal by clicking on ‘Generate Customer Id’ on the bottom of the customer page. 

    Then, the customer will be guided to the next page where he will have to fill out mandatory information such as First Name, Email id, Sum Assured, Policy Number, etc. Once this information is filled, he must click on the Submit button, which will send the generated customer id to the registered email id of the applicant with a link for resetting the password.

  • Nomination

    Having a nominee is very important for any Postal Life Insurance policy. Not having a nominee, unfortunately, delays the claim settlement in the event of the death of the insured. The policyholder must take the responsibility to appoint a family member or a loved one as nominee and check if the nominee name is correctly entered in the policy documents.

    Nomination can be altered any time, but if the policy is assigned to a bank to avail of a loan, the nomination automatically gets cancelled.

    On reassignment, ownership of the policy comes back to the policyholder, but the old nomination will not hold anymore. A fresh nominee must be appointed. 

    In the event of the death of the policyholder, the nominee will be paid the claim amount that is due. If the nominee is a minor, name and details of the guardian or appointee who will receive the stipulated amount on behalf of the minor must be furnished. In the rare event of insured outliving the nominee, a new nominee name must be registered in the record through the post office.

  • Policy Lapse

    In case there is a lapse in the payment of premium, the policy will be deemed lapsed. In case of policies that are less than 3 years old, if more than 6 premium amounts remain unpaid, the policy will lapse. In case of policies that are more than 3 years old, if more than 12 premium amounts remain unpaid, then the policy will lapse.

  • Policy Reinstatement

    A lapsed policy can be reinstated. Reinstatement can happen automatically under the following conditions:

    • The policy has completed 3 years, and the premium has not been paid for 12 months
    • The policy has not been completed 3 years premium has not been paid for 6 months

    In the above cases, the insured can deposit all the premium arrears till the date, along with interest rates prescribed by the postal department. The Chief Postmaster General of the concerned post office must be informed along with a certificate of good health in the said format, duly signed by the insured. A certificate from the employer stating that the policyholder has not taken any leave for medical reasons during the above period is necessary.

  • Loan

    A loan can be granted with the Postal Life Insurance policy as security if the policy has been in effect for at least 3 years in a row, has acquired a surrender value of Rs. 1000 and is unencumbered. Ensuing loans can also be granted subject to fulfilment of terms and conditions.

  • Enquiries

    For any enquiry regarding your Postal Life Insurance Policy or Rural Postal Life Insurance, the customers may contact the toll-free customer service number 1800-180-5232/155232.

  • Contact for Grievances

    At any point in time, if customers are not happy with the service provided by Postal Life insurance, the best place to voice their concerns is the post office that issued the policy. Customers can visit the post office, call or write to them. There is also a way to register complaints online through the official website.

    They can send their concerns by email to pli.dte[at]gmail.com. Whichever way the customer sends the complaint; it gets registered in the system right away and will reach the PLI office for further processing.

  • Policy Checklist

    • Ensure the safety of the policy bond
    • Check the first page of Policy schedule for any claim payments due
    • Note policy number along with due dates and premium due
    • Have post office contact number handy
    • Inform PLI about change in address, mobile number, and email id
    • Check premium due date and pay on time without waiting for the notice
    • Appoint a nominee for the policy

FAQs

Written By: Paisawiki - Updated: 17 November 2020