Are you curious about Postal Life Insurance (PLI) and whether it’s a good fit for you? This blog will explain what PLI is and why it might be a smart choice. Offered by the Indian Postal Service, PLI provides reliable, affordable coverage for several, including government workers and those in rural areas. Keep reading to discover how PLI can help secure your financial future and offer peace of mind.

What is Postal Life Insurance?

Postal Life Insurance (PLI) is a government-backed plan from India Post, offering affordable coverage for government employees, defence and paramilitary personnel, and rural residents. As of 2024, graduates and diploma holders can also apply. Premiums are paid at post offices, and the policy includes loan options. PLI provides budget-friendly life insurance with essential financial protection.

Postal life insurance vs standard term insurance plans

Here's a table comparing Postal Life Insurance (PLI) with standard term insurance plans:

Feature

Postal Life Insurance (PLI)

Standard Term Insurance Plans

Provider

Government-run, offered by the Department of Posts, India

Offered by private life insurance companies

Cost-Effectiveness

Generally more cost-effective due to government backing

Varies because it’s based on coverage and the provider. However, generally, it’s quite pocket-friendly.

Interest Rates

Typically, higher interest rates compared to other investment options

No interest component; pure risk coverage with no returns

Eligibility

Primarily for government and semi-government employees in India

Available to anyone meeting the insurer’s criteria

Geographic Availability

Only available in India

Available in multiple countries and regions

Financial Security

Provides financial stability and security for policyholders and their families

Provides financial protection to beneficiaries in case of the policyholder’s death

Coverage Flexibility

Limited to government and semi-government employees

Available to a broader audience with varying policy terms and conditions

Loan Facility

Offers loans against the policy's surrender value

Generally, no loan facility; purely a risk coverage product

Trust & Reliability

High due to government guarantee

Varies based on the reputation of the private insurance company

Limitations

Limited to specific employee categories and geographic regions

Widely available with flexible terms but can be more expensive

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Postal Life Insurance Plan Details

Types of Postal Life Insurance Policies 

Descriptions 

Whole Life Assurance (Suraksha)

Provides lifelong coverage with fixed premiums. Can be converted to an Endowment Assurance Policy up to age 59, with specific conversion rules.

Joint life assurance (Yugal Suraksha)

Covers two individuals under one plan, often at a lower cost than two separate policies. Pays out once, typically upon the first death.

Anticipated Endowment Assurance (Sumangal)

Offers lump sum payments at set intervals during the policy term, plus the sum assured and accumulated bonus at maturity.

Endowment Assurance (Santosh)

Combines life insurance with savings. Pay fixed premiums for a set period and receive the sum assured plus accumulated bonus at maturity.

Children Policy (Bal Jeevan Bima)

Insures children and pays out the sum assured plus bonus when the child turns 18.

Convertible Whole Life Assurance (Suvidha)

Allows conversion to an endowment plan after a specified period, with fixed premiums throughout.

Case Studies of Postal Life Insurance Plans?

Type of  Postal Life Insurance Plans

Who Should Opt for it?

Use Case

Whole Life Assurance Policy

If you want lifetime coverage

Archan is the sole breadwinner of his family; he chooses the Whole Life Assurance Policy to ensure that his family is financially secure even after his death.

Endowment Assurance Policy

If you want both savings and insurance benefits

Suvidha wants to save for her child's education and also secure their future in case of his untimely demise, so she chooses the Endowment Assurance Policy.

Convertible Whole Life Policy

If you want flexibility in changing the policy type

Uma is unsure about her future financial needs and wants the option to switch to another policy type later; she chooses the Convertible Whole Life Policy.

Joint Life Assurance Policy

If you want to cover multiple people under a single policy

Suma and his wife want to take a policy that covers both of them, so they choose the Joint Life Assurance Policy.

Anticipated Endowment Policy

If you want to receive periodic payments in addition to the sum assured

Ratan wants to receive regular payouts to fund his retirement, so he chooses the Anticipated Endowment Policy.

Children Policy

When looking to secure the future of children

Vimal wants to secure the future of his children's education and other needs in case something happens to him.

What are the details of postal insurance policy schemes?

Scheme Name

Min. Age

Max. Age

Policy Term

Minimum Sum Assured

Maximum Sum Assured

Maturity Benefit

Death Benefit

Loan Facility

Whole Life Assurance

19 years

55 years

-

Rs. 20,000

Rs.

50 Lac

Sum Assured + Bonuses

Sum Assured + Bonuses

Yes

After

4 years

Endowment Assurance

19 years

55 years

5-35 years

Rs. 20,000

Rs.

50 Lac

Sum Assured + Bonuses

Sum Assured + Bonuses

Yes

After

3 years

Convertible Whole Life Assurance

19 years

55 years

-

Rs. 20,000

Rs.

50 Lac

Sum Assured + Bonuses

Sum Assured + Bonuses

Yes

After 4 years

Joint Life Assurance 

21 years

45 years

5-20 years

Rs. 

20,000

Rs.

50 Lac

Sum Assured + Bonuses

Sum Assured + Bonuses

Yes

After 3

years

Anticipated Endowment

Assurance

19 years

45 years

15 and 20 years

Rs. 20,000

Rs. 

50 Lac

Anticipated payouts at 5-year intervals + Final payment

Sum Assured + Bonuses

Yes

Children Policy

5 years

20 years

-

Rs. 1,000

Rs. 3,00,000

Sum Assured + Bonuses

Sum Assured + Bonuses

No

The table outlines the key features of each PLI scheme. Keep in mind that the specific terms and conditions may differ based on individual circumstances.

What are the Features of Postal Life Insurance Policy?

  1. Insurance Coverage: Postal Life Insurance offers affordable life coverage based on the policy and premium chosen.
  2. Premium Payment: Premiums can be paid monthly, quarterly, semi-annually, or annually.
  3. Nomination Facility: You can nominate or change a beneficiary who will receive the sum assured if you pass away.
  4. Loan Facility: After three years, you can borrow against your policy.
  5. Surrender Value: You can surrender the policy before maturity and receive its value.
  6. Policy Revival: Revive a lapsed policy within five years of the last payment.
  7. Grace Period: Enjoy a one-month grace period for premium payments without extra charges.
  8. Conversion: Convert your policy to Endowment Assurance or Whole Life Assurance after three years.
  9. Free Look Period: Cancel the policy within 15 days for a premium refund
  10. Duplicate Document: Obtain a duplicate policy document if lost or damaged by applying and paying a fee.

What is the Postal Life Insurance Scheme Bonus?

Postal Life Insurance (PLI) provides annual bonuses based on investment performance, adding extra value to guaranteed payouts. The bonus, a percentage of the sum assured, enhances the policy’s value and is paid out at maturity or upon the policyholder's death.

What is the  Postal Life Insurance policy bonus for the FY 2023-2024?

Type of PLI Scheme

Bonus Rate

Endowment Assurance (EA)

₹52 per ₹1,000 of the sum assured amount

Whole Life Assurance (WLA)

₹76 per ₹1,000 of the sum assured amount

Convertible Whole Life Policies

₹76 per ₹1,000 of the sum assured amount (for Whole Life bonus rate)

However, on conversion, the applicable rate will be equal to the Endowment bonus rate.

Anticipated Endowment Assurance

₹48 per ₹1,000 of the sum assured amount

Here's what you need to know about the PLI (Postal Life Insurance) policy bonus for the fiscal year 2023-2024:

  • Bonus rates are specified per ₹1,000 of the sum assured.
  • For the Endowment Assurance (EA) scheme, the bonus is ₹52 per ₹1,000 of coverage. This means if your policy covers ₹1,000, you get a ₹52 bonus.
  • For example, with a sum assured of ₹1,00,000 in an Endowment Assurance policy, you would receive a ₹5,200 bonus (₹52 multiplied by 100). This bonus is an additional benefit added to your coverage amount.

What are the Benefits of Postal Life Insurance Policy?

Here’s a concise breakdown of Postal Life Insurance (PLI) benefits:

  1. Income Tax Exemption: Premiums for PLI are tax-exempt under Section 80C of the Income Tax Act, 1961.
  2. Affordable Premiums: PLI offers some of the lowest premium rates available.
  3. Additional Benefits: Enjoy features like loans against the policy, surrender value, and revival of lapsed policies.
  4. High Coverage: PLI provides coverage up to ₹50 lakhs.
  5. Transferability: You can transfer your PLI policy to any Circle within India at no extra cost.
  6. Passbook Facility: Keep track of your premiums and policy details with a passbook.
  7. Advance Payment Discounts: Paying six months in advance can save you 1% on premiums or 2% if you pay twelve months in advance.
  8. Quick Claims: The claims process is fast and straightforward.
  9. No Medical Exam: No medical examination is needed for policies with a sum assured up to ₹5 lakhs.

Who are eligible for Postal Life Insurance Plans?

Postal Life Insurance (PLI) is available to a broad range of individuals and organisations -

Individuals Eligible for PLI

  • Defense Services personnel

  • Para Military Forces personnel

  • Central and State Government employees

  • Employees of Local Bodies

  • RBI staff

  • Graduates and diploma holders

  • Employees of Government-aided Educational Institutions

  • Employees of Public Sector Undertakings

  • Employees of Nationalized Banks and Financial Institutions

  • Employees of Autonomous Bodies

  • Contract-based employees in Central/State Government

  • Employees of Scheduled Commercial Banks

  • Extra Departmental Agents in the Department of Posts

  • Employees of accredited Educational Institutes

Organisations Eligible for PLI

  • Credit Cooperative Societies and other Cooperative Societies registered under the Cooperative Societies Act, partly or fully funded by:

  • State Government

  • Central Government

  • RBI

  • Nationalised Banks

  • State Bank of India (SBI)

  • National Bank for Agricultural and Rural Development (NABARD)

Joint ventures with a minimum 10% government/PSU stake


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Conclusion

In summary, Postal Life Insurance (PLI) offers affordable coverage with flexible premiums, tax benefits, and loan options, making it a reliable choice, especially for those in rural India. However, considering the flexibility of term insurance, you might want to rethink your long-term financial commitments to ensure you choose the best option for your needs.