Post Office Life Insurance: What are the Various Benefits that it Offers?
Post Office Life Insurance: An Overview
Human life is full of uncertainty. So, it is extremely important to cover yourself against these uncertainties like death and accidents by purchasing insurance. Life insurance is one of the essential insurance policies to have in your life to save your family from a financial crisis. You must get life insurance before investing in any financial instrument because it protects your loved ones in the event something happens to you. In this article, we are going to learn about post office insurance schemes, PLI scheme details, benefits, and eligibility for PLI in the post office.
What is Post Office Life Insurance?
PLI full form is postal life insurance. PLI in the post office offers a wide range of life insurance plans at economical premium rates to fulfill the needs of different people. Post office PLI schemes are one of the oldest and most trusted life insurance schemes in India. It was started in February 1884 to provide benefits under a welfare scheme to their employees. As on 31 March 2021, post office life insurance has more than 50 lakh PLI policies. The policy provides financial protection to your family in case of the demise of the policyholder. The earlier you buy an insurance plan, the less premium you will have to pay to the insurance company and you should choose the tenure of your insurance policy till your retirement. You can buy postal life insurance online or visit the post office. Also, the policyholder has the option to surrender the postal insurance policy after 3 years. However, the surrender value is determined by the type and tenure of the plan.
- Postal life insurance schemes are guaranteed by the Government of India.
- The minimum age to buy PLI is 19 years and the maximum age is 55 years.
- You can buy the PLI policy at affordable premium rates.
Eligibility for Postal Life Insurance
- People who are employed in the central government, Reserve Bank of India, Defense services, financial institutions, public sector undertakings, Department of Posts, state government, paramilitary forces, local bodies, nationalized banks, educational institutions, extra-departmental agents, and autonomous bodies are eligible to buy postal life insurance.
- People who are employed in the private sector are not eligible to buy postal insurance.
- The entry age of the person should be from 19 to 55 years for all post office PLI schemes except the child plan. The maximum age to buy a postal children policy is 45 years. Make sure that the child's age must be between 5 and 20 years.
- The minimum insurance coverage on the PLI scheme is INR 20,000 and the maximum is INR 50 lakh.
- The policyholders are supposed to pay the premium on a monthly basis.
What are the Benefits of Postal Insurance?
- Outstanding returns: PLI scheme in the post office provides the highest coverage along with an added bonus that is higher than other insurance.
- Loan availability: You can avail of loan benefits against your insurance policy. However, you have to wait for three policy years to get a loan in case of an Endowment Assurance plan and four policy years in case you have bought a whole life insurance plan.
- Conversion of policy: The policyholders who have bought a whole life assurance policy can transform it into an endowment assurance plan. You can also change the Endowment Assurance plan to another Endowment Assurance plan.
- Appointment of a nominee: Post office policies allow the policyholders to nominate their beneficiaries. You also have an option to change the nominee of your PLI during the tenure of the plan.
- Revival of the policy: Postal insurance can be revived in case the policyholder has not paid the premium for 6 consecutive premium amounts if the policy remains active for less than three years. The policy can also be revived in case the policyholder has not paid the premium for 12 consecutive premium amounts if the policy remains active for more than three years.
- Issue of duplicate policy document: You can apply for the issuance of a duplicate document of the policy in case you have lost or torn the original document of the policy.
- Income tax benefits: The policyholder can avail of income tax benefits U/S 80C of the Income Tax Act of up to INR 1.5 lakhs on the premium paid. You can avail tax exemption of 20% of the total insurance coverage.
- Multiple PLI policies: You are allowed to buy more than one PLI policy. However, the total sum assured should not be less than INR 20,000 and exceed INR 10 lakhs.
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To conclude, In India, PLI schemes are the most preferred insurance to give you financial protection in case of the demise of the policyholder. However, before opting for any life insurance policy, you must assess your life insurance objectives, calculate the insurance cover you need for your family, choose a comprehensive plan that has the right terms, and most importantly, choose a prestigious life insurance provider.
Is postal life insurance maturity tax-free?
The maturity amount of your PLI scheme is taxable.
Is PLI India Post better than LIC schemes?
PLI India Post offers insurance at economical premium rates. The bonus rate offered by the PLI post office is more than 7%, whereas LIC schemes offer bonus rates of 4 to 5%.
Which postal life insurance schemes are best?
Whole life assurance, Endowment Assurance, Anticipated endowment plan, Convertible whole life insurance plan, Children's policy, and Joint life insurance are considered the best PLI online schemes.
What is the rate of interest charged on a loan against a postal life insurance scheme?
The policyholder has to pay 10% per annum on the loan against their postal insurance.
Can I buy postal life insurance online?
Yes, you can buy postal life insurance online.