Postal Life Insurance Schemes : PLI Salient Features
6 Main Postal Life Insurance Schemes
1. Endowment Assurance (EA)- Santosh
This is the most popular form of life insurance since it not only makes provision for the family of the life assured in the event of his early death but also assures a lump sum at any desired age.
The amount assured, if not paid by reason of his early death becomes payable at the end of the endowment. Premium is payable for a term of the years equal to the endowment term or until death, if it occurs within this period.
If the payments of premium cease after the premium has been paid at least for three years, the policy will be treated as paid up the risk coverage will be for the reduced sum and a proportionate bonus will be payable at the time of maturity/death claim.
2. Whole Life Assurance (WLA): Suraksha
Whole life insurance means a life insurance contract entered into by government to pay a given sum of money with an accrued bonus to the insured on attaining the age 80 years or to his/he legal representatives or assignees on the death of the insured whichever occurs earlier provided, the policy is in force on the date of claim.
This is the best form of Life Insurance for family provision since it enables the life assured to pay
all the premiums during the ordinarily vigorous and most productive years of life, relieving him from the necessity of making payments late in life when they might become a burden.
Premiums are payable for a selected period of years or until death if it occurs within this period (upto 55, 58, & 60 years of age). If the life assured survives the premium paying period, it continues in full force, provided all premium have been paid, but no further premium is required to be paid.
The value of the policy along with bonus is payable to the nominee after death of the assured orto the Assurant when he attains the age of 80.
3. Convertible Whole Life Assurance (CWLA):-
Convertible Whole Life Assurance means a life insurance contract entered into by government to pay a given sum of money with accrued bonus to the insured either on attaining the age of 80 years or on the death of the insured to his/her legal representative or assignees whichever occurs earlier, with option to the policyholder to convert the policy, at the end of 5 years ( with a grace period at the end of 6 years) from the date of commencement of risk into an Endowment Assurance maturing at a specified age.
The scheme is designed to meet the needs of a younger person who is at the beginning of his /her career and has prospects of an increase of income after a short period.
The object is to provide maximum insurance coverage at a minimum cost and also simultaneously offer a flexible contract that can be altered into an Endowment Assurance at the end of five years from the commencement of the policy.
It is expected that there would be an increase of income after five years and that the proponent would be in a position to pay a higher premium after conversion. Initially, this policy is issued for with a premium payable till the age of 60 years. At the end of five years from the commencement, the assured has the option to convert it into an Endowment Assurance payable at the age to be chosen (50,55,58 or 60 years) ¸ subject to payment of a suitably increased premium from the date of such conversion.
4.Anticipated Endowment Assurance (AEA)(for 15/20 years):- Sumangal
This plan is meant for persons, who besides desiring to provide for their family and old age feel the need for lump sum benefits at periodical intervals. Instead of paying the sum assured under the policy at the end of the term of the policy, part of the sum Assured is paid during the term of the policy by way of interim payments, while at the same time retaining the full risk till the end of the term.
It is a Money Back Policy with maximum sum assured of ₹ 50 lacs & best suited to those who need periodical money back. Survival benefits in AEA Policy are paid to the insurant periodically. Such payments will not be taken into consideration in the event of unexpected death of the Policy holder. In such cases, full sum assured with accrued bonus is payable to the assignee, nominee of legal heir of AEA Policy holer.
- Policy term: AEA-15 years and AEA- 20 years
- Minimum age 19 years; maximum age at entry 40 years for 20 years’ AEA term policy & 45 years for 15 years’ AEA term policy
- Survival benefits paid periodically as under: –
- AEA-15 years Policy- 20% each on completion of 6 years, 9 years & 12 years and 40% with accrued bonus on maturity
- AEA_20 years Policy- 20% each on completion of 8 years, 12 years & 16 years and 40% with accrued bonus on maturity
- Last declared Bonus- ₹ 48/- per ₹ 1000 sum assured per year
5. Yugal Suraksha/Joint Life Insurance:-
This is a joint life Endowment Assurance on two lives. The sum assured under this policy is payable at the end of the endowment term or on the first death of the two lives assured, if earlier premiums are payable for a term of years equal to the end of the term or until death if it occurs within this period.
The spouse should be literate and in a position to furnish standard proof of date of birth.
6. Children’s Policy:-
This has come into force with effect from 20.01.2006. This is an ADD-On policy to provide insurance
cover to the two children of the policyholder. This is a non-medical policy where parents should not be aged above 45 years and the child should be between 5 and 20 years. The sum assured should be between Rs.20000/ and Rs.300000/
Other features are as follows:
a). Only one EA policy will be issued per child. The child includes an adopted child.
b). No loan shall be applicable. However, the policy can be surrendered /made paid up provided
at least 5 years premium is paid.
c). The outstanding term of the main policy shall not be less than the premium paying period of the children’s policy.
d). Sum assured with endowment assurance bonus shall be payable on its maturity or earlier on the death of the child.
e). In the event of the death of the insured of the main policy before the expiry of the children’s policy, no further premium shall be payable for the balance period of the policy.
f). In the event of death of the child the policy will be terminated and the claim settled in favour of the main policyholder.
g). In case, the child commits suicide within 2 years of the acceptance of the policy, no claim shall lie against the department and the claim gets rejected.
High Value Policy in PLI i.e Sum Assured more than 20 lakh – Few features
The amount of maximum or aggregate sum assured is Rs.50, 00,000/- under all PLI Plan.
Eligibility: All existing policyholders, as well as new insurant from the eligible clientele of PLI, can be
given enhanced coverage within the maximum or aggregate sum assured of 50 lakhs.
Age at entry: will be the same as applicable at present for various plans.
Financial eligibility: The maximum sum assured will be restricted as under:
a) Till 40 years of age at entry: Sum assured should be 10 times Annual income subject to total aggregate or maximum of Rs.50 Lakhs.
b) For 41 years and above Sum assured should be 7 times annual income subject to total aggregate or maximum of Rs.50 Lakhs. In addition, information on gross salary drawn by the proponent during the last three months should be ascertained and inserted as item no. 7 (A) of proposal form.
Special Medical Reports: The existing practice of having the proponents medically examined in cases of sum assured above 1 Lakh will be continued. For all policies whose sum assured is above 20 Lakhs (new policy & existing policies taken together) involve calling for Special Medical reports as under:
a) Age up to 35 years: ECG, Routine Urine Analysis, SBT13, HB%
b) Age between 36 yrs to 45 yrs: ECG, Routine Urine Analysis, SBT13, CTMT, Hemogram
c) Age between 46 yrs to 55 yrs: ECG, Routine Urine Analysis, SBT13, CTMT, Hemogram, HbA1c
d) 56 yrs & above (for revival cases): ECG, routine Urine Analysis, SBT13, CTMT, Hemogram, and HbA1c& X ray of chest
(Details of the above tests are attached and should be annexed to the existing proposal form as sl.29 (f)
Goods and Service tax:-
With effect from 1.7.2017, GST on the premium on insurance premiums from all PLI and RPLI policyholders will be collected.
The GST @ 4.5% of the gross premium during the first year and @ 2.25% on subsequent years i.e. second year towards (rounded off to the nearest rupee) is to be collected from the policyholders separately and a consolidated receipt issued for the total amount. I.e. premium + GST. For first year premia is 4.50% and for subsequent years premia it is 2.25%.
The service tax is to be collected every time the premium is collected, be it monthly, quarterly, half-yearly or yearly at the rates cited above. Insurants who pay the premium in the form of cheque(s) should be advised to include the service tax components also at the above-prescribed rate in the
value of the cheque.
Other features of PLI :-
Any person who is eligible to the benefit of the Post Office Life Insurance Fund under Rule 2, 2-A, 2-B or 2-C may effect an insurance- Life insurance, Endowment Assurance, Convertible Whole Life Assurance, Anticipated Endowment Assurance, Yugal Suraksha, Children policy or all of them on his life for a sum not less than Rs.20000/10000 (For GDS of DOP, Group-D employees of central and state Govt., PSU, Banks the minimum value PLI is kept as Rs.10000/) in each class but not more than an aggregate of Rs Fifty Lakhs of all classes of insurance taken together.
In the case of WLA and EA plans under PLI, the minimum term of the policy for proponents above the age of 50 years where the sum assured exceeds Rs. 5 lakhs, will be 7 years, and further for a person aged 54 years the minimum term will be 6 years. In other words, a person who will attain the age of 51 years on his next birthday may take the policy of EA-58, EA-60 or to opt for ceasing his premium at the age of 58 and or 60 years in the case of WLA policy.
Similarly, a person who will attain the age of 52 or 53 or 54 years on his next birthday may take the policy of EA-60 or opt for ceasing his premium at the age of 60 years in the case of the WLA policy.
Commencement of risk in PLI Policy
The date of commencement of risk will be the same as the date of acceptance of the proposal by the competent authority provided the advance deposit is not less than the amount of the first premium as worked out after the proper security of the proposal.
After acceptance of the proposal, a policy bond, acceptance letter, preliminary receipt book label (for
pasting on Premium Receipt book for cash policy), and intimation letter, etc shall be generated. After scrutiny and signatures on these documents by the competent authority,
Medical Scheme Postal life insurance:
In every case where the proposal for a Whole Life Assurance, Endowment Assurance, Anticipated Endowment Assurance, Joint Life Assurance, or Children Policy is submitted in the prescribed form, the proposer must undergo a medical examination by the prescribed authority and must be declared fit for such insurance by the said authority.
The prescribed medical authorities
| S.No. | Limit of sum assured | Status of Medical Officer |
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| a. | For insurance up to and including Rs.5 Lakhs (both PLI and RPLI) |
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| b. | For insurance above Rs.5 Lakhs and up to Rs.10 Lakhs |
i. Dy. The civil surgeon or aboveii. Medical officer equivalent to Dy. Civil Surgeon or above employed in Central and State government, Municipal District board, Local Board, Cantonment board or Union Board Hospital or dispensaries and also Medical Officers of units of Public Sector undertakings both State and Central, with at least 10(ten) years’ experience nearest to the place of duty of the proponents. iii. |
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| c | For insurance in excess of Rs.10 Lakhs | i. Civil Surgeon, Medical Officers in the employment of Government enjoying the status not lower than that of a Civil Surgeon or Chief Medical Officer, nearest to the place of duty of the PLI proponent. CMO Grade I/Specialist Class II shall also be considered as equivalent to the Rank of Civil Surgeon.ii. Medical Officer(Allopathic) equivalent to Civil Surgeon employed in Central and State government, Municipal District board, Local Board, Cantonment board or Union Board Hospital or dispensaries and also Medical Officers of units of Public Sector undertakings both State and Central, with at least 15(fifteen) years’ experience nearest to the place of duty of the proponents. iii.
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| d | For insurance of more than Rs.20 Lakhs | i) Civil Surgeon, Medical Officers in the employment of Govt. enjoying the status not lower than that of a Civil Surgeon or Chief Medical Officer, nearest to the place of duty of the proponent. CMO Grade I/Specialist Grade II shall also be considered as equivalent to the rank of civil Surgeon.ii) Medical Officer (Allopathic) equivalent to Civil Surgeon employed in central and state Govt, a public sector undertaking both State and center with at least 10 years experience, nearest to the place of duty of the proponent. iii) |
The Medical Officer concerned will receive a fee for each medical examination at the following
rates:-
| Sl.No. | Amount of sum assured for a proposal |
Amount of fee payable |
| 1. | Up to the sum assured of Rs.10 Lakhs |
Rs. 50/-(Rs. fifty) per examination |
| 2. | Above Rs.10 Lakhs and upto Rs.20 Lakhs of sum assured |
Rs.70/-(Rs. seventy) per examination |
| 3. | Above Rs.20 Lakhs of sum assured | Rs.120/-(Rs. one hundred twenty) per examination |
| 4 | Revival cases where sum assured is Rs.20 Lakhs and the age of the insurant is 55 years and above |
Rs.150/-(Rs. one hundred fifty) for each opinion |
Non-Medical Scheme in Postal Life Insurance:-
The following are the conditions for exemption of medical examination.
a). Any person whose age on the next birthday does not exceed 40 years for a sum assured up to Rs. 5 lakhs.
b). The sum assured does not exceed Rs.2,00,000/-
c). The medical history of the proponent does not reveal any adverse features.
In case of a claim of the policy before maturity, the payment against such claim shall be restricted to
the following amounts:
a). 35% of the sum assured along with the accrued bonus in case the death of the insured person
occurs before the completion of one year from the date of acceptance of the proposal.
b). 60% of the sum assured along with the accrued bonus in case the death of the insured person occurs before the completion of two years, but not before the completion of one year, from the date of acceptance of the proposal.
c). 90% of the sum assured along with the accrued bonus in case the death of the insured person occurs before the completion of three years, but not before the completion of two years, from the date of acceptance of the proposal.
d). Full sum assured along with the accrued bonus in case the death of the insured person occurs after completion of three years from the date of acceptance of the proposal.
The Defence Personnel and Assam Rifles and Para-Military Personnel are exempted from Medical Examinations. Full claim for the sum assured along with the vested bonus shall be admissible to the claimants if a policy becomes a claim after its acceptance.
Rebates on Advance Premia Postal Life Insurance Policy:-
In case of policies where premia are payable on a monthly basis, the insurant may pay premia for a
number of months in advance to avail of the facility of rebate.
i)A rebate @ 2% shall be allowed if the premia for 12 months are paid in advance.
ii)
A rebate @ 1% shall be allowed if the premia for 6 months are paid in advance.
iii) Similarly, a rebate of 0.5% shall be allowed if the premia for 3 months are paid in advance. (This is
applicable only for RPLI).
Refund of Premia:-
In case the proposal is rejected, the initial premium will be refunded to the proponent in full.
Issue of Duplicate Policy Document:-
Whenever an insurant informs the department about the loss, damage, or mutilation of the policy documents and applies for the issue of fresh policy documents in lieu, action will be taken as follows:
a). In case a policy document is reported damaged, mutilated, or partially burnt, the remaining
portion of the policy document should be submitted by the policyholder as evidence of the possession of the policy.
In case the policy is lost by fire, earthquake, a certificate by fire authorities, or any other authority, Revenue authorities/Postal/Telecom authorities are required to be produced.
b). Wherever the policyholder reports that his policy has been lost or burnt completely, an FIR should be lodged with the police, a copy of which should be produced along with the final police report besides an advertisement in the newspaper in case the sum assured of the policy Rs.5,00,000/- or more.
Subject to the execution of an indemnity bond in a stamp paper worth Rs.100/- by the insurant jointly with two solvent sureties and payment of prescribed charges for preparation of duplicate policy documents (Rs.50/-), the CPC will issue a duplicate policy. Post Master will accept the indemnity bond.
If the policy is lost from the department’s custody an indemnity bond in LI-10(f) form is to be given.
If the policy is lost from the party’s custody (assigned policy), an indemnity bond in the LI-10(h) form is to be given.
If the policy is lost from the party’s custody (unassigned policy), an indemnity bond in LI-10(i) is to be given.