Article

Postal Insurance
September 14 , 2012

Postal Life Insurance schemes are available for employees of government organizations and a few others including government-aided educational institutions, financial institutions and autonomous bodies. Employees of private sector are not eligible for these plans. They may avail plans under Rural Post Life Insurance.

Terms and benefits of postal insurance are very constrained. Maximum sum assured on most policies is Rs 10 lakhs on individual policies and Rs 20 lakhs combined in all Post Office Life Insurance plans. Minimum entry age is 19 years and maximum entry age is 57 years. Policy can be surrendered after completion of three years. Loan facility is available after completion of four years. However you would lose out on bonuses if the policy is surrendered or assigned to loan before completion of five years. After five years bonuses accrue on the reduced sum assured if surrendered or assigned for loan.

Seven plans are available under Postal Life Insurance (PLI) as under

1. Whole Life Assurance (Suraksha)

The policy pays sum assured along with accrued bonuses to the beneficiary in the event of death of the policy holder.  It can be converted to Endowment Assurance Policy after completion of one year and before 57 years of age of the insured.

2. Endowment Assurance (Santosh)

The policy pays sum assured along with accrued bonuses to the policy holder at maturity or to the beneficiary in the event of death of the policy holder.

3. Convertible Whole Life Assurance (Suvidha)

This policy is similar to Endowment Assurance policy. It can be converted to Endowment Assurance after 5 years and before the policy holder reached the age of 55 years. If not exercised prior to six years, the policy continues to remain a Whole Life Assurance policy.

4. Anticipated Endowment Assurance (Sumangal)

This is a money back policy. Maximum sum assured is Rs 5 lacs. Term of either 15 years or 20 years must be chosen. In the event of death, full sum assured along with accrued benefits are paid to the beneficiary.

5. Joint Life Assurance (Yugal Suraksha)

If one of the spouses is eligible for Postal Life Insurance, both spouses can avail Endowment Assurance under this scheme. Both spouses will be covered up to the limit of sum assured and accrued bonuses with one premium.

6. Scheme for Physically handicapped persons

Physically handicapped persons can avail any of the above plans. Depending on the nature and extent of handicap slightly higher or lower premiums will be charged.

7. Children Policy

This policy is open for up to two children of PLI policy holders. Children between 5 and 20 years are eligible. The main policy holder should not have crossed 45 years of age. Maximum sum assured is Rs 1 lakh. On death of the main policy holder no more premiums will have to be paid. At the maturity of term full sum assured along with accrued bonuses will be paid to the children. At the event of death of the child/children, the sum assured along with accrued bonuses shall be paid to the main policy holder.

PLI does not offer any term insurance plans. Similar plans as above are available under Rural Postal Life Insurance (RPLI). With the advent of more customer-friendly products from private life insurance companies, it remains a surprise that PLI policies are still in force. Penetration of LIC and private insurers in rural areas has increased. Individuals can buy term insurance policies with flexibility of policy term and sum assured from the life insurance companies.

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