Revival of Postal Life Insurance Policy in Instalments – A Smart Financial Move
Introduction
In the fast-paced world of digital transactions and instant gratification, the revival of traditional financial products like the Postal Life Insurance (PLI) policy in installments presents a prudent and strategic option for individuals seeking secure and hassle-free savings. Payment of the Instalment Revival of PLI Policy is a good option for policyholders.
While modern insurance products and investment schemes dominate the market, the revival of PLI policy offers a unique blend of stability, ease, and long-term benefits. Now, we will further explore the concept of Instalment Revival of PLI Policy and discuss the various advantages it brings to policyholders.
Understanding Postal Life Insurance (PLI)
The Postal Life Insurance scheme, provided by India Post, has been a reliable and popular insurance choice for millions of Indians for several decades. It is a government-operated insurance program to provide financial security to individuals and their families.
The policy offers a combination of insurance and investment benefits, making it an attractive option for risk-averse individuals.
What is Policy Revival?
Policy revival refers to the process of reinstating a lapsed Postal Life Insurance policy by paying the overdue premiums along with applicable interest. A lapsed policy occurs when a policyholder fails to pay the premium within the grace period, leading to a temporary termination of the policy’s benefits. However, with the Instalment Revival of the PLI Policy facility, policyholders have the opportunity to bring their policies back into force and avail the benefits they had signed up for originally.
Conditions for Revival of Lapsed PLI/RPLI Policy
The revival of a policy under Post Office Life Insurance Rule-2011, Rule 58 allowed on any number of times during the entire term of the policy including the relaxation given under Rules 56(3) and 57(3) for re-instatement.
However, a period of continuous 5 years should not have passed from the date of the first unpaid premium for such lapsed policy.
The Concept of PLI Policy Revival in Instalments
To make the policy revival process more accessible and manageable for policyholders, India Post introduced the option of reviving Postal Life Insurance policies in installments.
SO individuals can reinstate their lapsed policies by paying the outstanding premiums and arrears of interest in a maximum of 12 installments instead of one lump sum
This approach allows policyholders to resume their insurance coverage without straining their finances significantly.
Revival Premium Payment of PLI Policy in Instalments: A Step-by-Step Guide
If you have an insurance policy that has lapsed due to non-payment of premiums, there’s still hope to revive it and secure your coverage. The Postmaster General, Head of Division, Postmaster, or Central Processing Centre (GPO/Head Office) has the authority to allow the revival of a policy that has become void under Rule 56(1) or has ceased to be active under Rule 57(1).
This process can be facilitated by paying the arrears of premiums and the accrued interest in convenient installments, at most 12, in deserving cases. Let’s explore the steps involved in this revival process:
Step 1: Seeking Authorization
To initiate the policy revival process, the concerned individual must seek authorization from the Postmaster General, Head of Division, Postmaster, or Manager of the Central Processing Centre (GPO/Head Office). The request for revival should be made in writing, with the reasons for the lapsed policy and a genuine commitment to fulfilling the payment obligations.
Step 2:- Obtain installment revival quotes from the Post Office.
Installment revival quotes are available in the McCamish system of PLI. You can visit any nearest post office and request to provide the revival quotes generated through the system, the maximum number of revival installments will be 12, hence you may request the quote according to your repaying capacity.
Submit the revival application for revival of your PLI Policy to the CPC/Head Post office. It will take a week to issue a formal revival order of your PLI policy.
Step 3: Formulate the Revival Plan and timely payment of installments.
Once your revival is approved, you will receive an intimation from PLI to deposit the premium in installments. However, for a better revival plan following is suggested by the PLI:-
For example, an insurant submitted a revival application on the 6th of January, and his revival request is approved by CPC/HO on the 11th of the same month with the option of payment of the revival amount in 12 installments.
Then, the insurant must pay the first revival installment (including the premium due for the month of January) by 31st January with the 2nd revival installment to be paid on or before the first day of the subsequent month i.e. on or before 1st Feb.
However, if the insurant pays the first and second revival installments in the month of January itself, then the next revival installment (i.e., 3rd installment) shall become due to be paid on or before 1st March.
So Insurant can get a period of a complete 1 month (the whole month of February) to pay his 3rd installment. This process should be followed for subsequent installments.
Further, the premium amount shall be continuously paid on the due date or within the grace period of a particular month to avoid further lapsation.
Accordingly, insurant(s) choosing to pay of revival premium in installments may be suggested that they should opt for paying 1st and 2nd revival installment (apart from premia payable) in the month of revival itself so that he/she gets the next complete month for paying the 3rd revival installment.
Such Insurant should be further advised to continue paying subsequent revival installments in such a manner only, to avoid lapsation.
Apart from payment of revival installments, the due premia should also be paid on the due dates or within the grace period to avoid lapsation.
So in this case, the policyholder should prefer to pay the first two revival installments in one go, during the month of revival of the policy with his/her premia.
The request for revival should be preferred beginning of the month.
Step 4: Ensuring Continuous Coverage
During the revival process, it is essential for the policyholder to maintain regularity in subsequent premium payments. As soon as the first installment is deposited, the coverage for the policyholder’s life will be reinstated.
However, this coverage will remain intact only if all subsequent installments are paid on time, along with the normal monthly premiums and any other arrears as they fall due.
Step 5: Policyholder’s Passing
In the unforeseen event of the policyholder’s demise during the revival process, the insurer will still honor the claim subject to certain deductions. If the policyholder has diligently followed the revival plan by depositing the installment of arrears along with the regular monthly premiums, the claim amount will be paid to the beneficiary.
However, any outstanding arrears of premiums, accrued interest, outstanding loan amount, and interest thereon will be deducted from the claim amount.
Step 6: Complying with the Terms
To ensure a smooth policy revival process, it is crucial for the policyholder to comply with all the terms and conditions set by the Postmaster General, Head of Division, Postmaster, or Manager of the Central Processing Centre (GPO/Head Office).
Regular, timely payments and adherence to the revival plan will lead to a successful reinstatement of the insurance policy.
Step 7: Exploring Other Options
If the policy revival seems unfeasible due to financial constraints or other reasons, consider exploring alternative solutions.
Depending on the policy type and terms, some insurers may offer options like a paid-up policy, reduced coverage, or converting the policy to a different plan.
These alternatives can provide you with some level of coverage and financial protection, even if full policy revival is not possible. However, all such plans will be available only once you have revived your policy.
Step 8: Maintaining Disciplined Payments
Once your policy is successfully revived, maintain disciplined and timely premium payments. Paying your premiums promptly ensures that your policy remains active and your coverage continues without any interruptions.
This financial responsibility will also enhance your creditworthiness and reliability as a policyholder.
Advantages of Instalment Revival of PLI Policy
a. Financial Convenience: Reviving a lapsed policy in installments provides financial relief to policyholders who may have faced unexpected financial challenges leading to the policy’s lapse.
By breaking down the outstanding amount into manageable installments, individuals can gradually bring their policies back on track without compromising on their daily expenses.
b. Continuous Coverage: A lapsed policy leaves the policyholder and their family vulnerable to financial uncertainties.
Policy revival in installments ensures that the life coverage and benefits provided by the policy remain continuous, giving peace of mind and financial security to the insured and their loved ones.
c. Flexible Tenure Options: Policyholders can select the tenure for their installment plan based on their financial capacity and preferences. This flexibility allows them to choose a duration that aligns with their income flow, making it easier to fulfill the installment payments.
d. No Loss of Bonus: One of the major advantages of policy revival in installments is that policyholders retain access to all the benefits they were entitled to before the policy lapsed. This includes the maturity amount, death benefits, and any accumulated bonuses.
e. Tax Benefits: Postal Life Insurance policies offer tax benefits on both the premium paid and the claims received, as per prevailing tax laws. By reviving the policy, individuals can continue to avail themselves of these tax advantages and reduce their tax liabilities.
FAQ:-
Can I revive my lapsed PLI policy?
Yes, it’s possible to reinstate your lapsed PLI policy under the following conditions:
– The policy has not reached its maturity date.
– A continuous period of five years has not elapsed from the date of the first unpaid premium.
– The life assured is insurable at the time of revival, as determined by the applicable criteria.
Also Read :-
Can I pay my PLI policy revival premium payment in installments?
Yes, You can opt for revival arrear premium payment in a minimum 2 and a maximum 12 installments.
How to pay the revival amount in installments?
Let you have an arrear amount of Rs.100,000 and your monthly regular premium with GST is 1500/ and you opt for 10 installments from Jan-2023 onwards, so you have to make payment as under:-
January- 2023 Installments Rs.11500/- (Rs.100,00 installment +1500 Regular Premium)
So you have to make 1st installment premium in Jan-2023 and so on.
A lump sum revival amount can be checked from the customer portal, however, to get the PLI installment revival amount you have to visit the nearest Post Office and request to provide the both lumpsum and installment revival quote from the system, this can be obtained any computerized HO/SO post office nearby you.
How to get PLI policy revival in installments?
If you want to pay the PLI revival premium amount in installments, while submitting the revival request you have to mention specifically that you want to avail the installment revival mentioning the total number of installments.
What if forgot to pay the premium again?
It is very important condition with installment revival of PLI policy is that you must pay the regular installments of the revival amount you have chosen after availing the installment revival facility. If you forgot any installments it will create a further tedious process for again revival of your lapsed policy.
Is there any separate form for installment revival requests for PLI?
There is no separate form for installment revival of postal life insurance policy.
Conclusion
The Instalment Revival of the PLI Policy brings forth a practical solution for policyholders who may have faced financial setbacks but still wish to maintain their insurance coverage.
The option to revive the policy in installments provides not only financial convenience but also ensures continuous coverage and a plethora of benefits. As individuals strive for financial stability and security, considering the revival of a lapsed PLI policy in installments emerges as a smart and viable financial move in the long run.