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Everything you need to know about Postal Life Insurance Scheme

dateKnowledge Centre Team dateMay 27, 2021 views112 Views
Postal Life Insurance Scheme

Considering life’s uncertainty, your family’s future is your biggest concern. Getting life insurance is one of the best decisions. However, it is rare to find a scheme that gives you high returns at low premium rates. Moreover, even if it promises you these benefits, is it worthy enough?

The Postal Life Insurance Policy (PLI) gives you all the mentioned benefits with the trust of the Indian Government. It is one of the oldest insurance products in India.

What is the Postal Life Insurance Scheme?

Postal Life Insurance is an insurance scheme that the Government of India offers to Central and State Governments, public sector undertakings, educational institutions aided by the Government, nationalized banks, etc.

PLI’s best feature is that it fetches good returns at extremely low premium limits.

Features of Postal Life Insurance

  • The scheme provides tax exemption to the insured under Sec. 88 of Income Tax Act.
  • If you pay the premium in advance for a policy period of 6 months, you are eligible for a discount on a premium worth 1% of the value.
  • If you pay the premium in advance for a policy period of 12 months, you are eligible for a discount on a premium worth 2% of the value.
  • A nomination facility is provided.

6 Types of Insurance Plans under Postal Life Insurance

There are six types of insurance plans offered under Postal Life Insurance Scheme offers:

1. Whole Life Assurance (Suraksha)

Under this scheme, the assured amount with the accumulated bonus is either paid to the insured after they reach the age of 80 or to the nominee or legal heir following the insured’s death -- whichever comes first.

Other details:

  • Applicable age limit: 19-55 years.
  • Assured Minimum Sum: Rs. 20,000
  • Assured Maximum Sum: Rs. 50 Lakhs
  • Loan facility: available after 4 years of completion
  • Policy surrender: after 3 years of completion

2. Endowment Assurance (Santosh)

Under this scheme, the assured sum with the accrued bonus is paid to the proponent after reaching the pre-decided age of maturity.

In the event of the death of the insurant, the assured amount with bonus is paid to their nominee or legal heir.

Other details:

  • Applicable age limit: 19-55 years
  • Assured Minimum Amount: ₹ 20,000
  • Assured Maximum amount: ₹ 50 lakhs
  • Loan facility: after 3 years of completion
  • Policy Surrender: after 3 years of completion

Learn how increasing sum assured in a term plan is your weapon against inflation.

3. Convertible Whole Life Assurance (Suvidha)

This policy offers a whole life assurance cover with an option of switching to Endowment Assurance Policy after five years.

Other details:

  • Applicable Age Limit: 19-50 years
  • Assured Minimum Amount: ₹ 20,000
  • Assured Maximum Amount: ₹ 50 lakhs
  • Loan facility: after 4 years of completion
  • Policy Surrender: after 3 years of completion

There are other term insurance plans offered by insurance companies that comes with whole life cover option. If you opt for a whole life cover, you will be insured till you turn 99.

Learn more about whole life cover option.

4. Anticipated Endowment Assurance (Sumangal)

This scheme is suitable for people who require periodical returns. It is essentially a money-back policy with an assured maximum amount of Rs. 50 Lakhs. It offers periodic payment of survival benefits. However, these payments will not be considered in case of unprecedented death of the insurant. In that event, the full assured amount and accrued bonus will be paid to the insurant’s nominee or legal heir.

Other details:

  • Policy term: 15-20 years
  • Applicable age limit for a term policy of 20 years: 19 - 40 years
  • Applicant age limit for term policy of 15 years: 19 - 45 years
  • Periodical survival benefits are available as the following:

For a 15 years Policy - 20% of the assured sum is paid after 6, 9, and 12 years. 40% of the assured sum with bonus is paid on maturity.

For a 20 years Policy - 20% of the assured sum is paid after 8 years, 12 years, and 16 years. 40% of the assured sum with bonus is paid on maturity.

5. Joint Life Assurance (Yugal Suraksha

This scheme is a joint-life endowment assurance that entails the eligibility of one of the spouses for PLI policies.

Other details:

  • It provides life cover for both spouses to the extent of an assured amount with accrued bonus.
  • Assured Minimum Sum: Rs. 20,000
  • Assured Maximum Sum: Rs. 50 Lakhs
  • Age limit of spouses to be applicable: 21 - 45 years
  • Loan facility: After 3 years of completion
  • In case of the death of a spouse or the main policyholder, death benefits are paid to either of the survivors.

6. Children Policy (Bal Jeevan Bima)

This scheme provides insurance cover to the children of policyholders.

Other details:

  • Maximum number of children of policyholder eligible: 2
  • Age limit for children to be eligible: 5 - 20 years
  • The age of the policyholder or parent should not exceed 45 years.
  • In case of death of the policyholder, no premium has to be paid for the Children Policy.

The PLI has shown appreciable growth in the last decade. Policyholders who are looking for a smart insurance scheme are choosing PLI for its numerous benefits.

Apart from PLI, many insurance schemes yield numerous benefits for shareholders. Canara HSBC Oriental Bank of Commerce Life Insurance has insurance plans specifically tailored for you. Some of them are as follows:

1. Invest 4G Plan

The Invest 4G plan under Canara HSBC Oriental Bank of Commerce Life Insurance is an insurance plan with the following benefits:

  • The scheme ensures stress-free living through its guaranteed regular income plan.
  • It has the option of limited premium payments.
  • The scheme also offers assured loyalty additions.

2. iSelect Star Term Plan

This is a highly flexible plan that protects you from the uncertainties of life.

Some of its benefits are as follows:

  • Availability of life cover at affordable prices.
  • Advantage of aligning the plan to suit your needs.
  • Freedom to choose between limited time cover and life cover.
  • Option for adding a spouse to the same insurance policy.
Postal Life Insurance Scheme

Utmost care must be taken while applying for any insurance scheme. Protecting your loved ones from financial calamities is, after all, your biggest priority.

Having a life insurance policy during these trying times has become an extreme necessity. With COVID-19 spreading like a wildfire in the country, it is wise to be protected financially to secure the future of your loved ones. We often think about our family and how they will manage their lifestyle if something happens to us. So, rather than leaving things to chance and procrastinate – its better if you plan and research about the right life insurance plans that can be beneficial for you.

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Frequently Asked Questions (FAQs) for Life Insurance

The premium is one of the most important factors to consider before buying a policy. Many people buy a life insurance policy with a high sum assured but are unable to process the premiums for the entire premium payment tenure. You can get a better idea of the premium outgo with the premium calculator available in the 'Tools and Calculator' section of www.canarahsbclife.com.

Life insurance plans come with several riders which increase the efficiency of the policy for the buyer. For instance, if you have a history of terminal illness in your family it would be advisable to opt for terminal illness rider with your term insurance. Riders or add-ons help in customising the standard policy benefits for the requirement of different families. The iSelect term insurance plan comes with a built-in cover for terminal illness, and option for protection against accidental death or disability. You can also opt to cover your spouse's life under the same policy by paying an additional premium.

Insurance companies calculate the premiums based on several factors such as age, gender and occupation.

Age:It is one of the biggest factors that influence life insurance premiums. Premiums tend to be low when the life insured is younger as the chances of contracting diseases is low. Young people also opt for policies with longer tenures and pay premiums for a longer duration, which makes the policy cheaper for young people.

Gender:The insurance premium for women is generally lower when it comes to life insurance plans. Women live longer and pose a lesser risk of a claim leading to lower premiums for them.

Lifestyle habits:The premiums for people who smoke or drink is always higher due to higher health risks.

Policy term:Policy terms are also taken into consideration by insurers while deciding the premium amount. Policies with longer tenure are cheaper as compared to short-duration policies.

Mode of purchase: The platform that you use to buy the policy also determines how much you will have to pay for the plan. People who buy life insurance policies online have to pay lower premiums as compared to offline policies.

Occupation:The nature of your work is an important factor that influences the premium amount. Certain occupations like shipping and mining are considered more dangerous as compared to jobs in services industries. The insurance premium rises with the risk profile.

Processing life insurance claim is a transparent and smooth process with Canara HSBC Oriental Bank of Commerce Life Insurance.

In case of the death of the life insured, the nominee will have to intimate the company by filling a Death Claim Form and sending it to the nearest branch office.

Once the form is received, the claim is registered by the insurer.

After the registration of the claim, the company will send the claims pack along with the related forms such as physicianâ s statement form and employer certificate that need to be filled.

Along with the duly filled forms a few documents such as original [policy document, death certificate, copy of bank passbook, hospital or treatment records, photo identification and address proof have to be provided.

The claim is processed on the submission of relevant documents. Once the documents are verified, the claim amount is released post all due diligence.

Household expenses rise with age. The cost of children's education increases along with other lifestyle expenses. The iSelect term plan offers an option to increase the cover according to the life stage. If opted, the insurance cover increases by 25% at every 5-year terminal till the 20th policy year.

Even though a life insurance policy is bought to protect your family in your absence. There are chances of the claim being rejected due to several factors.

False information: If the policyholder provides false information or conceals important information while buying the policy, the insurer has the right to reject the claim after his/her death.

Type of death: Deaths due to suicide in first policy year, intoxication or pre-existing disease is not covered under life insurance.

Premium payment: The payment of premiums on time is of utmost important to avail the benefits of life insurance. Life insurance policy may lapse on the failure to pay the premiums

Nominee details: An insurance company can put the claim on hold if the nominee details have not been filled or not been updated by the policyholder.

Suicide: If the life insured commits suicide within 12 months of buying the policy, the insurance companies generally pay 80% of the total premiums paid.

Buying life insurance online is not only safe but a better option. Online life insurance policies have lower premiums and the individual is not required to visit the insurer's branch or a bank. Online insurance policies also offer higher benefits. Customers should, however, buy online policies only from credible insurers and should check for SSL certificate on the website to ensure that the website is legitimate.

The cost of life insurance policies varies depending on factors like age, gender and occupation. The average cost of life insurance plans, especially term plans, is very low compared to the amount of coverage offered.

An individual is allowed to have multiple life insurance policies. People opt for more than one policy to increase the cover or avoid claim rejection. In case of multiple policies, even if the claim is rejected by one insurer, the beneficiaries may receive the benefit from a different insurer.

Life insurance policies are of different types. In the case of unit-linked or endowment policies the policyholder receives the maturity benefit at the end of the policy term. However, in the case of term insurance plans, there are no maturity benefits. The death benefit is only paid out after the death of the life insured.

When you buy life insurance, the insurance company asks for the nominee details. Only the person named as the nominee in the policy can cash out a life insurance policy in case of death of life insured.

A life insurance policy is generally taken for a specified period. After the policy duration of a term plan gets over, the policy simply terminates and ceases to exist. However, in the case of unit-linked plans or endowment, you can use the policy as a tool for retirement planning and the accumulated corpus is used by the insurer to pay you monthly amounts for your entire life.

If a policyholder purchases a term plan for 25 years and dies during the policy term. The family receives the death benefit. In the case of iSelect term plan, the policy provides four payment options to the beneficiaries. If the regular payment options are chosen the policy works as a source of regular income.

It is a popular misconception that life insurance is only for accidental deaths. A term life insurance plan like iSelect also covers terminal disease along with death. A terminal illness cover is important as health insurance pays only for the cost of treatment and hospitalization, but a terminal illness cover pays you a lump-sum amount which takes care of other expenses. On the other hand, unit-linked policies such as Invest 4G cover death and also provide decent returns for other financial goals such as buying a house of child's education.

It is ideal to buy life insurance in your early 20s because it’s is the time when people have just started with their professional life and so there are lesser responsibilities and financial liabilities to take care of. Also, if you buy life insurance at this age, you will be paying relatively lower insurance premiums since it’s a due fact that mortality rate in case of young people is low. And that is why insurance companies offer lesser premium rates to younger people as they think that they are most likely to be fit and healthier with less chances of filing a claim in future.

Once you have cancelled your life insurance policy, you will instantly lose your life insurance cover. Afterwards, your insurance company will get in touch with you and ask for valid reasons regarding the cancellation of your policy. In case you cancel your life insurance policy within the grace period, i.e. 15 to 30 days, depending on your insurer, then insurance company will reimburse the premium amount paid by you. But, no refunds will be paid to you if the policy is cancelled after the grace period.

Yes, you can take life insurance under Married Women’s Property (MWP) Act, 1984 only if you are a married man and a resident of India. Buying a life insurance plan under MWP Act would be helpful in saving your family’s financial well-being when you are not around. As per this policy, only wife and children would be eligible to receive the death benefits. You can also buy a policy if you are a widower or a divorcee. However, in that case, you can give your child’s name as your beneficiary. It is very simple to buy a life plan under MWP Act. All you need to do is to fill up an MWP addendum while purchasing an insurance policy.

Yes, there are different payment options for you to pay premiums. Here’re some of them

    1. Regular premium payment option – This premium payment option allows you to pay premiums equal to your policy term either monthly, quarterly, half yearly or annually.

    2. Single payment option – Through this premium payment option, you can pay the lump-sum amount in one single payment.

    3. Limited payment option -In this premium payment option, you can pay premiums for a specific period of time less than policy term either monthly, quarterly, half yearly or annually, but benefits of insurance can be enjoyed for a longer period of time.

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