Postal life insurance: Attractive, but restrictive

• Follow

Life insurance is one of the key instruments for a secure future for our near and dear ones. Most of us know about Life Insurance Corporation of India. But very few have any idea of postal life insurance or PLI.

Some of these schemes have more benefits than LIC, but everybody is not eligible to buy them.

What is PLI?

PLI (Postal Life Insurance) is exactly like any other life insurance. The only difference is, it is run and managed by India Post.

PLI currently offers only traditional plans and no term insurance or ULIP are offered through post offices. The policies are offered by Government of India through post offices only.

The advantage of PLI is that they offer the products at relatively cheaper premium with high bonus rates.

Currently, PLI offers six types of policies — Whole Life Assurance (Suraksha), Convertible Whole Life Assurance (Suvidha), Endowment Assurance (Santosh), Anticipated Endowment Assurance (Sumangal), Joint Life Assurance (Yugal Suraksha), Children Policy (Bal Jeevan Bima).

Who are eligible?

Unlike LIC or any other life insurance product, anyone cannot buy PLI. The Centre has issued a list of persons who can buy these life insurance policies that make it restrictive.

The following categories of people are eligible to buy postal life insurance – central government employees, defense services, para-military force personnel, state government employees, employees of local bodies, government-aided educational institutions, Reserve Bank of India employees, public sector undertakings employees, employees of nationalised banks employees, different autonomous bodies, postal agents, employees engaged/appointed on contract basis by central/ state government where the contract is extendable, employees of all scheduled commercial banks, employees of credit co-operative societies, NABARD and other such institutions notified by government, employees of deemed Universities an educational institutes accredited by recognised bodies.

In 2017, the Centre amended the list and added the following categories of people to the list. They are – teachers of all public and private schools and institutes, doctors, engineers, CA, management consultants, architects, lawyers and employees of listed companies of NSE (National Stock Exchange) and Bombay Stock Exchange (BSE) can also avail these 6 PLI along with the previous one.

Benefit of PLI

PLI offers the highest bonus rate in the industry. It stands at Rs 85/thousand in Whole Life Assurance (Suraksha) and Convertible Whole Life Assurance (Suvidha) scheme.

In Endowment Assurance (Santosh), Joint Life Assurance (Yugal Suraksha), Children Policy (Bal Jeevan Bima) the bonus is Rs 58/thousand. It is Rs 53/thousand in Anticipated Endowment Assurance (Sumangal) policy.

The buyer of these policies can also get tax benefits under section 80C of the IT Act.

The premium of PLI schemes is low compared to that in other companies offering life insurance. Also, facilities like assigning policies, taking loans against a policy, surrender and paid up value options are also available.

The policies can also be transferred to any circle within India at no additional charges.

You can get a discount if you deposit the premium yearly or half-yearly.