If you have a yugal Suraksha policy under the Postal Life Insurance plan with your spouse and now want to convert the policy into endowment assurance (EA-Santosh) due to divorce or other reasons, here we will provide a full guide for Conversion of Yugal Suraksha PLI Policy into Endowment policy.
What is Conversion of PLI Policy ?
Policy conversion allows you to change your existing life insurance policy plan to a different type of PLI plan.
Conversion of Yugal Suraksha PLI Policy into Endowment Assurance
You can convert your Yugal Surakasha PLI policy into endowment assurance subject to certain conditions mainly in case of divorce with your spouse. In this situation, it is mandatory to convert the Yugal Suraksha Policy into an endowment policy.
Conditions for Conversion of Yugal Suraksha PLI Policy
In case of divorce with spouse or any other reason conversion of Yugal Suraksha Policy into endowment policy, the following conditions will be applicable:-
- .Converting Yugal Suraksha to Endowment Assurance: You cannot extend the maturity term of your policy beyond what was chosen in the original Yugal Suraksha policy.
- Matching Maturity Terms: If the Endowment Assurance policy offers the same maturity term as your Yugal Suraksha policy, you can convert directly.
- Lower Maturity Term Option: If your desired maturity term is unavailable in the Endowment Assurance policy, it can be converted to the closest shorter term offered.
- For example, if you have a Yugal Suraksha policy YS-15 with a maturity age of 46 years, and your age at the time of conversion of YS into EA is 38 years, your policy will be converted into EA/45.
- Increased Premium: If the Endowment Assurance policy (being a new plan), even with a potentially shorter term due to unavailable options, has a higher premium than your current Yugal Suraksha policy, the increased premium will be charged from the date of conversion onwards.
- Retroactive Premium Adjustment: Additionally, you may be charged the difference in premium paid under Yugal Suraksha compared to the Endowment Assurance policy, along with interest of 12% per year. This additional charge will be calculated from the date you started your Yugal Suraksha policy up to the date of conversion.
- Payment before Conversion: This difference in premium with interest must be paid before the actual conversion to the Endowment Assurance policy can take place.
- Premium Reduction: If the Endowment Assurance policy, even with a potentially shorter term, has a lower premium than your current Yugal Suraksha policy, the reduced premium will be charged from the date of conversion onwards.
- No Refunds for Excess Paid Premiums: Even if the Endowment Assurance policy has a lower premium, previously excess paid premiums under Yugal Suraksha will not be refunded or adjusted in future premiums. This is because the original policy covered the risk cover of both spouses under Yugal Suraksha, justifying the higher premium compared to the single life coverage offered by the Endowment Assurance.
Should you consider the conversion of the Yugal Suraksha Policy?
Yugal Suraksha’s policy under Postal Life Insurance is one of the best policies that cover the risk of both spouses with a single policy and a slightly higher premium. This policy is specified beneficially where a women government employee is eligible for PLI policy being a government employee and her husband will be covered in this policy if he is serving in the private sector.
So conversion of any PLI policy into another is not beneficial except for some compiling reasons like divorce.
Process and documents conversion of Yugal Suraksha PLI Policy
In case of divorce, you have to intimate immediately to Postal life insurance and submit a request for conversion along with necessary documents like approved divorce documents from the court, original policy documents, premium receipt book, identity proof documents, and an application in plain paper.