Surrendering a Postal Life-Insurance Policy – Know the Detail Process
As we have already discussed surrendering a PLI policy is always a loss. You have to explore all other options instead of surrendering a Postal Life Insurance policy. However here we will discuss in detail how to surrender a Postal Life Insurance Policy.
However, in extreme cases, if you are considering surrendering a PLI policy, you must know the full process of how to surrender a postal life insurance policy, and what documents are required for surrendering a PLI policy.
Before surrendering a postal life insurance policy please check the estimated surrender value, Here you can check how to calculate the postal life insurance surrender value. So let’s start and know a detailed guide for surrendering a Postal Life Insurance policy
What is the Surrender Value of a Postal Life Insurance Policy
Surrender Value: The surrender value is the amount payable to an insured when they choose to surrender their PLI/RPLI policy for an immediate cash payment. This is only possible if at least 36 premiums have been paid, and the policy has been active for a minimum duration of 36 months. The surrender value is determined by factors such as the type of policy, its term, the total premium paid, the insured’s age at entry, age at surrender, and the applicable Surrender Factor.
Which PLI policies are eligible for Surrender?
The following type of PLI and RPLI policies are eligible for surrender only:-
- Whole Life Assurance (Suraksha -PLI and Gram Suraksha-RPLI )
- Endowment Assurance (Santosh-PLI and Gram Santosh-RPLI )
- Convertible Whole Life Assurance (Suvidha -PLI and Gram Suvidha-RPLI)
- Joint Life Assurance (Yugal Suraksha-PLI)
Which PLI Policies Are Not Eligible for Surrender?
The following types of PLI and RPLI policies are not eligible for surrender:-
- Anticipated Endowment Assurance (Sumangal-PLI and Gram Sumangal-RPLI)
- 10-year RPLI Anticipated Endowment Assurance (Gram Priya-RPLI)
- Children Policy (Bal Jeevan Bima-PLI and Gram Bal Jeevan Bima-RPLI)
How many times after buying a PLI policy can be surrendered:-
– A policy can only be surrendered if its duration is at least 3 years.
– The policy must be in force until the end of the month in which the surrender application is received. In other words, it should be an active policy and not lapse.
Surrender Bonus Conditions in Postal Life Insurance :
No bonus is payable for a policy surrendered before 5 years from the date of policy acceptance.
A proportionate bonus shall be paid on the paid-up value after the completion of 5 years, provided the policy remains in force for at least 5 years.
Policyholders must ensure the above criteria before surrendering their PLI policy.
It’s important to ensure that the policyholder meets the eligibility criteria and understands the implications of surrendering the policy before processing their surrender request.
How to get the surrender Quote of your PLI Policy Online/offline:-
To obtain a surrender quote for a PLI/RPLI policy, the system offers a convenient process accessible at any Departmental Post Office (SO/HO/PLI-CPC) through the following steps by the Postal Staff:
1. Navigate to the Home screen of McCamish.
2. Select the “Quote” option.
3. Click on “Surrender Quote.”
The same surrender quote can also be get through PLI customer Portal Online easily.
If a policyholder prefers to determine the surrender value at a Branch Post Office, the responsible BPM(Branch Postmaster) has the option to request the surrender quote generation from the Account Office, any SO (Sub Office), or HO (Head Office). Once generated, the BPM can then provide the surrender quote to the policyholder.
How to calculate the Surrender value of PLI Policy
Furthermore, it’s essential to note that the Surrender value is calculated based on the reduced sum assured or paid-up value. The paid-up value is determined as follows:
Paid up value = (Number of
premiums paid / Total number of premiums payable) x Sum assured.
The Surrender Value can be calculated using the formula:
Surrender Value = Surrender Factor x (Paid-up value + Proportionate bonus).
This information should be shared with policyholders to help them understand how the surrender value is
determined for their PLI/RPLI policies.
Which status type of PLI policy can be considered for Surrender:-
(i) If PLI Policy Status is “Policies in Force”
Policyholders can easily determine the surrender value of their active policies, meaning those that have not lapsed, by visiting any Departmental Post Office, including the Head Office (HO) or Sub Office (SO). The Post Office staff will provide the policyholder with a Surrender Quote, which contains the calculated surrender value as per the established rules and regulations.
(ii) If the PLI policy status is “ Lapsed Policy”
It’s important to note that PLI/RPLI policies in a lapsed status cannot be surrendered. Surrendering a policy is only applicable to those policies that are currently in force and not lapsed.
How to surrender a Postal Life Insurance Policy:-
How to submit the Surrender Application/Claim Form: –
The policyholder is required to complete and submit a Surrender Application/Claim Form in the designated format (as outlined in Annexure-I). This application should also include the Consent Form and the necessary supporting documents (Annexures II and III can be referred to for guidance). These documents should be submitted at any Post Office counter or the PLI CPC located at the Head Office.
It’s crucial to note that the
Consent Form must explicitly state that the policyholder accepts the Surrender
Value as indicated in the Surrender Quote. Additionally, the Consent Form
should emphasize that once the Surrender Value is paid, the policy cannot be
reinstated or restored. This information ensures that the policyholder is fully
aware of the consequences of surrendering their policy.
In case the PLI policyholder is Medically Unfit to submit the surrender request application/form:- The Process
If a policyholder is unable to personally visit the Post Office to submit their Surrender Application/ClaimForm (Annexure-I), either due to medical unfitness or being outside of India, they have the option to authorize another individual as a messenger for the submission. Here are the key details regarding this process:
Authorization of a Messenger for claim surrender value of PLI Policy:
1. The policyholder can appoint another person as a messenger for the submission of the Surrender Application and necessary documents.
2. The appointed messenger should be an adult, literate individual of sound mind, and they must not be insolvent.
Medical Unfitness of PLI Policy holder during claiming surrender a policy:
1. If the policyholder is medically unfit to visit the Post Office, they need to provide a self-attested medical certificate.
2. This medical certificate should be issued by a government hospital or a government-accredited hospital.
3. The certificate should confirm the policyholder’s medical unfitness and inability to visit the Post Office in
person. By allowing an authorized messenger and providing a valid medical certificate, policyholders who are
unable to visit the Post Office due to medical reasons or being outside the country can still proceed with their Surrender Application.
In case Policy holder is Abroad and unable to submit the surrender Request form
If a policyholder is currently residing outside of India and wishes to submit a Surrender Application/Claim
Form, they must follow these steps:
1. Authorized Messenger: The policyholder should appoint an authorized messenger to submit the Surrender Application and accompanying documents on their behalf.
2. Passport Copy: The policyholder must provide a self-attested copy of their passport. This copy should clearly display the date of departure from India.
3. Submission Through Messenger: The authorized messenger should submit the Surrender Application, the self-attested passport copy, and any other required documents at the designated Post Office or PLI CPC.
By following these procedures, policyholders who are residing outside of India can ensure that their Surrender
Application is processed correctly and in compliance with the necessary documentation requirements.
Documents to be submitted for surrendering a PLI Policy When submitting a Surrender Application for a PLI/RPLI policy at any Post Office counter or the CPC of HO, the policyholder should provide the following documents:
1. Surrender Application/Claim Form:
This form should be completed in the prescribed format as mentioned in Annexure I. It contains the necessary details for processing the surrender request.
2 Required Documents: – When submitting the Surrender Application/Claim Form for a PLI/RPLI policy, the policyholder should provide all the ORIGINAL documents. These original documents will be required to confirm their authenticity and accuracy. However, it’s important to note the following regarding the handling of original documents:
—Verification and Return of Original Documents: The original documents provided by the policyholder will be used for verification purposes. After verifying the originals against the copies submitted along with the Surrender Claim Form, the original documents will be returned to the policyholder.
—Policy Bond or Letter of Indemnity (Annexure-II): In cases where the original documents are not
available, the policyholder may need to submit a Policy Bond or a Letter of Indemnity (as per Annexure-II) in the original format. This original document will be retained by the receiving office.
—Document of Credit or Premium Receipt Book: If applicable, the Document of Credit or Premium Receipt Book will also be retained in its original form by the receiving office.
3. Consent Form: As mentioned in aboveof the guidelines, the Consent Form should be submitted. This form serves as the policyholder’s acknowledgment that they accept and agree to the Surrender Value indicated in the Surrender Quote. It also highlights that once a policy is approved for surrender or has been surrendered, it cannot be restored. This Consent Form ensures that the policyholder fully understands the implicationsof their surrender request.
How much time it takes to complete the surrender request of your PLI Policy?
In case if your PLI policy is less than Rs 20lakh Sum Assured, the surrender request is normally approved by the CPC level, however, if your PLI policy is more than 20 lakh sum assured, the surrender request will be approved by the next level officers. Normally surrender requests should be approved by the PLI as per the norms of the citizen charter for the said purpose.
How can I get my surrender claim amount?
Normally surrender value is paid through cheque by the post office, however, it you have a Post Office Saving bank account, the surrender value can be transferred in the same or some post office provide the ECS payment. So, check the payment option at the time while submitting the surrender request to the post office. Always mention your desired bank details in the surrender request application form to get the claim amount
easily.