Postal Life Insurance was introduced in 1884, managed by the Postal Department & considered to be one of the oldest schemes. It is a government-backed investment plan that ensures financial security by offering dual benefits of insurance with assured returns. This scheme is further divided into two plans: the Postal Life Insurance Scheme & the Rural Postal Life Insurance Scheme. Initially, it was provided only to postal department employees, then further extended to female employees.
With time, it further extended to Central & State government employees, & now to different government departments like Banks, defence, local bodies, educational institutes, public sector undertakings, professionals, stock exchange employees, graduates from central or state government recognised universities or colleges, etc. If you want long-term financial protection, i.e. life coverage along with assured savings, opt for Postal Life Insurance. But, in case you are looking for a steady income source post-retirement, combine PLI with the Best Pension Plan to ensure financial protection & a reliable source of income.
Features of the Postal Life Insurance Plan
Provided are the features of the Postal Life Insurance Plan:
- High Bonus Rates:
This plan provides high bonus rates, hence providing better returns to the policyholder.
- Low Premiums
This plan offers a fixed & affordable premium depending on the type of policy, age, & sum assured, making it a perfect choice for salaried individuals.
- Loan Facility:
This plan allows the policyholders to avail of the loan facility once the period of 3 to 4 years has been completed.
- Nomination & Policy Transfer:
This plan allows for to nomination of a beneficiary & even transfer of the policy in case the policyholder has to move anywhere in India.
- Duplicate Bond Issuance:
If the policy document has been lost, misplaced or damaged, the policyholder can get a duplicate document issued.
- Conversion Option:
This plan also allows for converting the current plan into some other plan, but within a certain time limit.
- Online Access:
This plan offers online access to the facilities, such as registering for the plan, making payments towards the premium, etc.
Persons Eligible for Postal Life Insurance
Provided is the list of individuals eligible to buy the Postal Life Insurance Plan:
- Paramilitary forces
- Banks
- Public Sector Undertakings
- Central & state government organisations
- Employees of companies listed with the National Stock Exchange & the Bombay Stock Exchange
- Defence personnel
- Professionals, such as MBAs, Doctors, Engineers, chartered accountants, lawyers, etc.
- Educational institutions
- Department of Posts
- Local bodies
Benefits of the Postal Life Insurance Plan
Provided are the benefits of the Life Insurance Plan offered by the postal department:
- Low Premiums, High Returns:
In the entire life insurance division, the postal life insurance plan offers the highest return at the lowest premiums.
- Loan Facility:
It allows to avail the loan facility once the period of 3 years has been completed in case of endowment plans & 4 years in case of whole life plans.
- Policy Conversion Option:
Some life insurance policies allow you to convert the plan to an endowment plan till the completion of a certain specified time.
- Duplicate Policy Bond:
In case the original bond gets damaged or lost, it allows issue of a duplicate bond can be issued.
- Nomination & Alteration:
This plan allows you to update the list of nominees at any time during the policy tenure.
- Portability Across India:
If the policyholder wishes to relocate, this plan can be transferred anywhere in India.
- Premium Payment Flexibility:
This plan allows payment of premiums through different modes, such as cheque, cash, standing instructions, etc.
- Tax Benefits:
The premium paid towards the plan is eligible for a tax deduction u/s 80C of the Income Tax Act, 1961. The maturity proceeds, on the other hand, are eligible for a tax exemption u/s 10(10D) of the Income Tax Act, 1961.
Taxation Benefits under the Postal Life Insurance Plan
Provided are the taxation advantages under the Postal Life Insurance Plan:
- Tax Deduction Under Section 80C
This section allows the premium paid towards the postal life insurance plan to be claimed as a deduction under the Income Tax Act, 1961, up to INR 1.5 lakhs.
- Exemption Under Section 10(10D)
The claim benefits received are exempt from tax u/s 10(10D), subject to the premium not exceeding the limits mentioned in the Income Tax Act, 1961.
Difference between the Postal Life Insurance Plan & Other Life Insurance Plans
Provided are the differences between the postal life insurance plan & other life insurance plans:
| Point of Difference | Postal Life Insurance Plan | Life Insurance Plan |
| Eligibility | Only government & PSU employees are eligible to avail the plan. | There is no such restriction; anybody can avail the plan. |
| Premium Rates | Premium rates are lower due to them being backed by the government of India. | The premium rates are generally higher. |
| Sum Assured | The upper limit under this plan for the sum assured is INR 50 lakhs. | In this case, the amount of sum assured is generally higher. |
| Can it be transferred? | Yes, it is allowed to transfer the funds all over India. | It depends on the insurance company. |
| Loan facility | The loan facility can be availed once the period of 3 to 4 years has been completed. | Whether the loan facility can be availed of or not depends on the terms & conditions of the plan. |
| Tax Benefits | A tax deduction can be availed u/s 80C of the Income Tax Act, 1961, for the amount of premium paid. | A tax deduction can be availed u/s 80C of the Income Tax Act, 1961, for the amount of premium paid. |
| Bonuses & Maturity Benefits | It entitles an assured bonus amount. | This entitlement depends on the type of plan held. |
| Policy Revival | Depending on certain conditions | Depending on certain terms & conditions |
| Market-Linked Plans | Not Applicable | It is applicable |
Conclusion
Postal Life Insurance offers dual benefits of insurance & investments, providing financial security to you & your family members. It helps make an affordable, secure, versatile investment option which offers security with discipline in long-term savings with tax advantages. To get financial security during the retirement phase, you can combine this plan with your Best Pension Plan, ensuring financial protection & a regular stream of income.