Should to opt for Postal Life Insurance Plans?

Postal Life Insurance Plans Should to opt for Postal Life Insurance Plans?

Many of us do not know that the Post Office offers Life Insurance policies for Government / Semi-Government employees. Postal Life Insurance offers high returns / bonus, but charges very low premiums compared to other private life insurance providers. Should Govt employees opt for Postal Life Insurance Policies? What are the benefits, features of Postal Life Insurance Plans? Who is eligible to subscribe to Postal Life Insurance Plans?

What is Postal Life Insurance?

Postal Life Insurance is a welfare scheme for the benefits of Government / Semi-government employees. Postal Life Insurance is the first life insurance provider for women employees where no other life insurance was offering this service earlier. Currently it offers 7 different life insurance schemes.

Unique about Postal Life Insurance Plans

Postal Life Insurance is the only insurance in India offering high returns/bonus with low premiums compared to other life insurance companies.

Also Read: Why should you consider Claim Settlement Ratio as prime factor in buying life insurance?

Features of Post Life Insurance Policies

The insured can take a loan by pledging his/her policy to the Head of the Circle/Region on behalf of the 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 of taking a loan.
A revival of his/her lapsed policy. Policy lapses after 6 unpaid premiums if it remained in force for less than 3 years and after 12 unpaid premiums if it remained in force for more than 3 years.
Issue of Duplicate Policy Bond in the case of the original Policy Bond is lost, burnt/torn/mutilation.
Conversion from Whole Life Assurance to Endowment Assurance and from Endowment Assurance to other Endowment Assurance as per rules.
Change of nomination.

What are various Postal Life Insurance Plans?

Postal Life Insurance offers 7 different plans.

Whole Life Assurance (SURAKSHA)
Endowment Assurance (SANTOSH)
Convertible Whole Life Assurance (SUVIDHA)
Anticipated Endowment Assurance (SUMANGAL)
Joint Life Assurance (YUGAL SURAKSHA)
Scheme for Physically handicapped persons
Children Policy

1) Whole Life Assurance Plan

This is a scheme where the assured amount with accrued bonus is payable to the assignee, nominee or the legal heir after death of the insured.
Minimum Age at entry is 19 years and the maximum Age at entry is 55 years.
The minimum Sum Assured is ₹ 20,000 and the maximum Sum Assured is ₹ 50 lacs.
The policy can be converted into an Endowment Assurance Policy after completion of one year and before 57 years of age of the insured.

2) Endowment Assurance Plan

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.
In case of unexpected death of the insured, the assignee, nominee or the legal heir is paid the full Sum Assured together with the accrued bonus.
The minimum age at entry is 19 years and the maximum Age at entry is 55 years.
The minimum Sum Assured is ₹ 20,000 and the maximum Sum Assured is ₹ 50 lacs.

Also Read: Should you invest in HDFC Click 2 Invest ULIP plan which comes with low charges?

3) Convertible Whole Life Assurance Plan

The features of this scheme are more or less same as Endowment assurance.
Policy can be converted into an Endowment Assurance after five years.
Age on the date of conversion must not exceed 55 years.
If option for conversion is not exercised within 6 years, the policy will be treated as Whole Life Assurance.

4) Anticipated Endowment Assurance Plan

It is a Money Back Policy with maximum Sum Assured of ₹ 50 lacs.
Best suited to those who need periodical returns.
Survival benefit is paid to the insurant periodically.
Two types of policies are available – 15 years term and 20 years term.
For the 15 years term policy, the benefits are paid after 6 years (20%), 9 years (20%), 12 years (20%) and 15 years (40% and the accrued bonus).
For the 20 years term policy, the benefits are paid after 8 years (20%), 12 years (20%), 16 years (20%) and 20 years (40% and the accrued bonus).

5) Joint Life Assurance Plan

It is a joint-life Endowment Assurance in which one of the spouses should be eligible for PLI policies.
Life insurance coverage is provided to both the spouses to the extent of the sum assured with accrued bonus with only one premium.
All other features are same as an Endowment policy.

6) Scheme for Physically Handicapped Persons

The maximum limit of Insurance for Physically Handicapped persons in PLI is the same as others and he/she can take any one of the plans.
A medical examination is compulsory under this scheme in order to determine the exact nature and extent of their handicap and its bearing on the life being insured.
Depending upon the nature and extent of handicap, normal or a slightly higher premium is charged.

7) Children Policy

The Scheme is envisaged to provide Insurance cover for the children of PLI/RPLI policy holders.
Maximum two children in family will be eligible to take child policy.
The main policy holder should not have attained the age of 45 years.
No premium is required to be paid on the children policy on the death of the main policy holder and full sum assured with the accrued bonus shall be paid to the child after the completion of the term of the children policy.

Also Read: What are the benefits of buying online life insurance plans?

Who is eligible to take these Postal Life Insurance Policies?

Central Government
Defence Services
Para Military forces
State Government
Local Bodies
Government-aided Educational Institutions
Reserve Bank of India
Public Sector Undertakings
Financial Institutions
Nationalized Banks
Autonomous Bodies
Extra Departmental Agents in Department of Posts
Employees Engaged/ Appointed a Contract basis by the central / State Government where the contract is extendable
Employees of all scheduled Commercial Banks
Employees of Credit Co-operative .
Employees of deemed Universities and educational institutes accredited by recognized.

Whether Salaried professionals in the private sector can join Postal Life Insurance?

No. If such salaried persons are there in Rural India, they can opt for for Rural Postal Life Insurance Plans.

Conclusion: Postal Life Insurance comes with low premiums and high sum assured. Like I always say, consider Term insurance plan first (which is not offered by Postal Life insurance). If you still think that you cannot invest in stocks / mutual funds etc., based on your risk appetite and believe in life insurance as an investment option, you should consider Postal Life Insurance plans as one of the best option.

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