NOTES ON PLI AND RPLI

PLI
* Postal Life Insurance was introduced on 1st February 1884. .
* It is the oldest Life insurer in this country.
It now covers employees of Central and State Governments, Central and State Public Sector Undertakings, Universities, Government aided Educational institutions, Nationalized Banks, Local bodies, autonomous bodies, joint ventures having a minimum of 10% Govt./PSU stake, credit co-operative societies etc. PLI also extends the facility of insurance to the   officers and staff of the Defence services and Para-Military forces. Apart from single insurance policies, Postal Life Insurance also manages a Group Insurance scheme for the Extra Departmental Employees (Gramin Dak Sevaks) of the Department of Posts.
PLI is an exempted insurer under Section 118 (c) of the Insurance Act of 1938. It is also exempted under Section 44 (d) of LIC Act, 1956.

PLI PLANS: PLI offers 6 (Six) types of plans: Whole Life Assurance  (SURAKSHA) Convertible Whole Life Assurance (SUVIDHA) Endowment Assurance  (SANTOSH) Anticipated Endowment Assurance  (SUMANGAL) Joint Life Assurance  (YUGAL SURAKSHA) Children Policy(BAL JEEVAN BIMA) WHOLE LIFE ASSURANCE: * This is a scheme where the assured amount with accrued bonus is payable to the assignee, nominee or the legal heir after death of the insurant * The assured amount with accrued bonus is payable to the insurant himself/herself after attaining the age of 80 years. * Minimum Age at entry is 19 years * Maximum Age at entry is 55 years. * The minimum Sum Assured is Rs 20,000 * The maximum Sum Assured is Rs 50 lacs. * The policy can be converted into an Endowment Assurance Policy after completion of one year and before 57 years of age of the insurant. * Loan facility is available after completion of  4 years * The policy can also be surrendered after completion of three years. * The policy is not eligible for bonus if surrendered or assigned for loan before completion of 5 years. * Proportionate bonus on the reduced sum assured is accrued if the policy is surrendered or assigned for loan. ENDOWMENT ASSURANCE: * Under this scheme, the proponent is given an assurance to the extent of the Sum Assured and accrued bonus till he/she attains the pre-determined age of maturity. * In case of unexpected death of the insurant, the assignee, nominee or the legal heir is paid the full Sum Assured together with the accrued bonus. The minimum age at entry is 19 years * The maximum Age at entry is 55 years. * The minimum Sum Assured is Rs 20,000 * The maximum Sum Assured is Rs 50 lacs. * Loan facility is available and policy can also be surrendered after completion of three years.   * The policy is not eligible for bonus if surrendered  or assigned for loan before completion of 5 years.   * Proportionate bonus on the reduced sum assured is accrued if the policy is surrendered or assigned for loan. CONVERTIBLE WHOLE LIFE ASSURANCE: * The features of this scheme are more or less same as Endowment assurance.   * Policy can be converted into Endowment Assurance after five years but before the completion of 6th year. * Age on the date of conversion must not exceed 55 years.   * If option for conversion is not exercised within 6 years, the policy will be treated as Whole Life Assurance. * Loan facility is available. * The policy can also be surrendered after completion of three years. * The policy is not eligible for bonus if surrendered  or assigned for loan before completion of 5 years. * Proportionate bonus on the reduced sum assured is accrued if the policy is surrendered or assigned for loan. * The policy is not eligible for bonus if surrendered or assigned for loan before completion of 5 years. ANTICIPATED ENDOWMENT ASSURANCE: * It is a Money Back Policy * The maximum Sum Assured of Rs 50 lacs.  * Best suited to those who need periodical returns. * Survival benefit is paid to the insurant periodically. *Two types of policies  are available –15 years term and 20 years term. benefits are paid 15 years term 20 years term 20 % 6 years 8 years 20 % 9 years 12 years 20 % 12 years 16 years 40 % and the accrued bonus 15 years 20 years Such payments will not be taken into consideration in the event of unexpected death of the insurant and the full sum assured with accrued bonus is payable to the assignee or legal heir. JOINT LIFE ASSURRANCE:  * It is a joint-life Endowment Assurance in which one of the spouses should be eligible for PLI policies. * Life insurance coverage is provided to both the spouses to the extent of sum assured with accrued bonus with only one premium. * All other features are same as an Endowment policy.             All the above schemes have compulsory medical examination. For the non-medical policy of any category (except AEA and Joint Life Assurance for which Medical Examination is compulsory), the maximum Sum Assured is Rs 1 lac.   CHILDREN POLICY  * The Department has introduced Children Policy under PLI/RPLI, with effect form 20th Jan 2006. * The Scheme is envisaged to provide Insurance cover to the children of PLI/RPLI policy holders. * Maximum two children in family will be eligible to take children policy. * Children between the age of 5 and 20 years are eligible * The maximum sum assured is Rs 3 lakh or equivalent to the sum assured of the main policy holder which ever is less. * The main policy holder should not have attained the age of 45 years. * No premium is required to be paid on the children policy on the death of the main policy holder and full sum assured with the accrued bonus shall be paid to the child after the completion of the term of the children policy. * On the death of the child/children, full sum assured with the accrued bonus shall be payable to the main policy holder. * Main policy holder shall be responsible for payments for the Children Policy. * No loan shall be admissible on Children Policy.   * The policy shall have facility for making it paid up provided the premia are paid continuously for 5 years. * No Medical examination of the Child is necessary. However, the child should be healthy on the day of proposal and the risk shall start from the date of acceptance of proposal. * The policy shall attract bonus at the rate applicable to Endowment Policy. The POIF Rules amended from time to time shall be applicable to Children Policy.

LIMITS OF SUM ASSURED IN POSTAL LIFE INSURANCE:
*  Any person who is eligible to the benefit of Post Office Life Insurance Fund under Rule 6, may effect an insurance-Whole Life Assurance, Endowment Assurance, Convertible Whole Assurance, Anticipated Endowment Assurance and Yugal Suraksha Policy or all of them on his life for a sum not less than Rs. 20,000 in each class but not more than an aggregate of Rs. Fifty Lac  (Rs. 50,00,000/-) in respect of one class/all classes of insurance policy (s) taken together.

 * The value of policy shall be taken in multiples of Rs. 10,000/- after minimum limit of Rs.20,000/- i.e. Rs. 20,000/-, Rs.30,000/-,Rs. 40,000/- and so on. 

PLI is the only insurer in the Indian Life Insurance market today, which gives the highest return (bonus) with the lowest premium charged for any product in the market. A PLI/RPLI policy holder also gets following facilities : Change of nomination. The insurant can take loan by pledging his/her policy to Heads of the Circle/Region on behalf of President of India, provided the policy has completed 3 years in case of Endowment Assurance and 4 years in case of Whole Life Assurance. The facility of assignment is also available. Assignment of Policy to any Financial Institution for taking loan. Revival of his/her lapsed policy. Policy lapses after 6 unpaid premiums if it remained in force for less than 3 years and after 12 unpaid premiums if it remained in force for more than 3 years. Issue of Duplicate Policy Bond in case of the original Policy Bond is lost, burnt/torn/mutilation. Conversion from Whole Life Assurance to Endowment Assurance and from Endowment Assurance to other Endowment Assurance as per rules.

Q. What is PLI? A. A contract entered into by the Government to pay a given sum of money on the death of an individual to his nominee or himself, if he survives that period. Q. What is the difference between PLI and other Insurance? A. PLI is only for Government and Semi-Government employees. Moreover PLI is the only Insurer that offers low premium and high bonus. Q. Is PLI guaranteed? If so, by whom? A. PLI is guaranteed by Government of India. Q. Is there any limit to the number of policies one can take for children? A. One can take policies for two children. Q. What is the necessity of sending the PLI Policy Bond to office address of the Insurant? Why can this not be sent to the residence of Policy holder? A. PLI policy is issued to people who are employed under Government/Semi-Government sector etc. That is why the policy bond is sent to the Office address of the Insurant. Q. How can a policy be transferred from one PO to other? A. The system of transfer of PLI policy is very simple. The policy holder can apply to the Chief Post Master General through the Post Office where the policy stands or the PO in which he desires to pay the premium. The PO will accept the application and send to the CPMG (PLI). Q. Which type of PLI policy among your scheme is more beneficial to opt for without hesitation? A. All policies in PLI are beneficial. Every scheme has some unique features. In EA policy, you will get your savings along with bonus after the prescribed number of years. Eligibility Q. Who are eligible for obtaining a PLI Policy? The employees of following are eligible for PLI policy: Central Government Defence Services Para Military forces State Government Local Bodies Government-aided Educational Institutions Reserve Bank of India Public Sector Undertakings Financial Institutions Nationalized Banks Autonomous Bodies Extra Departmental Agents in Department of Posts Employees Engaged/ Appointed an Contract basis by central/ State Government where the contract is extendable Employees of all scheduled Commercial Banks Employees of Credit Co-operative Societies and other Co-operative Societies registered with Government under the Co-operative Societies Act and partly or fully funded from the Central/ State Government/RBI/ SBI/ Nationalized Banks/ NABARD and other such institutions notified by Government Employees of deemed Universities an educational institutes accredited by recognized bodies such a National Assessment and Accreditation council, All India Council of Technical Education,Medical council of india etc Q. Whether salaried professionals in Private Sector can join PLI? A. Such categories are not eligible but they can have RPLI policies subject to fulfilling other conditions. Q. If one spouse is working in a Government Organization but the other is not, is there any scheme in PLI for both? A. We have 'Yugal Suraksha' scheme under which both can jointly get a policy. After paying a little more premium, both can be covered under this assurance scheme. Q. Can one continue the policy if one quits the Government service? A. One can continue by making payment at any one of the 1, 55,000 post offices throughout the country, even after quitting service.. PREMIA PAYMENT Q. What is the mode of premium deposit? A.  The Premium Receipt Book is issued to the Insurants for the deposit of Premium in any departmental PO, and there is a facility of recovery from pay for all employees belonging to the Central Government. Q. Is there any other mode of payment? A. The premium can be paid through Cheque. Q. Is premium recovered through salary? A. Yes, recovery of the premia through salary is possible, in offices where it is remitted directly to PLI. In case where it is not, it is possible by appointing a Group Leader, who collects the premia from the insurants and deposits in a post office along with PR book. However, premia are to be deposited in any post office as per convenience i.e. monthly/half yearly/ yearly where there is no recovery through salary. Q. Why is the premia for children’s policy higher? A. As both children’s and parent’s risk is covered. Q. Can one revive a lapsed policy? A. If the premia are not paid for 6 months in case policy is in currency for 3 years (or) 12 months in case policy is more than 3 years old, then the policy becomes void. This needs revival to make it active. Revival shall not be allowed on more than two occasions during the entire term of the policy. Policy can be revived any time one year before maturity. Q. What happens if one forgets to pay one’s premium in a month? A. One can pay the premium in the subsequent month, by paying a minimum fine of Re. 1/- per hundred of sum assured. LOAN Q. Is loan facility available in PLI? A. Loan can be taken from EA policy after completion of 3 years and in respect of Whole Life after completion of 4 years. Loan facility is available in AEA policies. Q. Is Home loan available? A. No Q. What are the terms on which loan can be availed? EA policies after 3 years from date of issue of policy. WLA policies after 4 years. Interest 10% p.a. Calculated on six monthly basis Loan entitlement is calculated on a prefixed proportion of these surrender value Interest should be paid on(or) before 21st of due month (i.e. 6 monthly once) SURRENDER Q. What is surrender value of a policy? A.” Surrender value” of a policy, means the amount that is payable to an assured, when he foregoes the contingent benefit of his policy and surrenders it for an immediate cash payment. Q. What will be the surrender value of the policy? A. Surrender value depends on the surrender factor and type and term of policy. Q. Can one get the full amount paid with accrued bonus, if policy is surrendered prematurely? Endowment Assurance policy can be surrendered after 36 months. WLA policy can be surrendered after 48 months. Children policy can be surrendered after 60 months. No surrender for AEA policy. Bonus will be taken into account after 5 years for surrender value calculation on the paid up value. But surrendering any policy prematurely is always a loss to the insurant. Hence, it is suggested not to go for surrender. It is not a simple saving scheme but it aims to give risk coverage also. It provides immediate Insurance coverage from the date of acceptance. Full policy amount with accrued bonus will be given even if death occurs on the very next day of acceptance of the proposals for all bonafide cases.

RPLI

Rural Postal Life Insurance (RPLI) came into being as a sequel to the recommendations of the  Official Committee for Reforms in the Insurance Sector (Malhotra Committee).  The Committee had observed in 1993 that only 22% of the insurable population in this country had been insured; life insurance funds accounted for only 10% of the gross household savings.  The Committee had observed: “ The Committee understands that Rural Branch Postmasters who enjoy a position of trust  in the community  have the capacity to canvass life insurance business within their respective areas…..” The Government accepted the recommendations of Malhotra Committee  and allowed Postal Life Insurance to extend its coverage to the rural areas to transact life insurance business with effect from 24.3.1995, mainly because of the vast network of Post Offices in the rural areas and low cost of operations. The prime objective of the scheme is to provide insurance cover to the rural public in general and to benefit weaker sections and women workers of rural areas in particular and also to spread insurance awareness among the rural population. As on 31.03.2015, we have more than 23.51 million RPLI policies.

RPLI offers following types of plans: Whole Life Assurance ( GRAMA SURAKSHA) Convertible Whole Life Assurance (GRAMA SUVIDHA) Endowment Assurance ( GRAMA SANTOSH) Anticipated Endowment Assurance  (GRAMA SUMANGAL) 10 Year RPLI (GRAM PRIYA) Children Policy (BAL JEEVAN BIMA) The salient features of the Whole Life, Endowment, Convertible Whole Life and Anticipated Endowment Schemes of RPLI are same as the corresponding schemes of PLI except that the minimum Sum Assured is Rs.10,000 and the maximum Sum Assured is Rs.10 lac.  The maximum age limit of entry is 55 years in case of Whole Life and Endowment Assurance but 45 years in case of other plans. All the schemes have compulsory medical examination.  For the non-medical policies, the maximum limit of Sum Assured is Rs.25,000/-, and maximum age is 35 years.   In case of  Non-standard age proof for Rural PLI policies, the maximum age limit is 45 years.

LOAN TIPS: Loan is admissible on Whole Life Assurance (WLA), Endowment Assurance (EA) and Convertible Whole Life Assurance (CWLA) policies. Currency of policy should be minimum of 3 years in case of EA and CWLA. Currency of policy should be minimum of four years in case of WLA. Policy should be unencumbered/ unassigned. Loan Limit: (a) Whole Life Assurance Currency of Policy Percentage of surrender value on which loan is admissible More than 4 years to 7 years 60% More than 7 years to 12 years 80% More than 12 years 90% (b) Endowment Assurance and Convertible Whole Life Assurance Currency of Policy Percentage of surrender value on which loan is admissible More than 3 years to 5 years 60% More than 5 years to 10 years 80% More than 10 years 90% Insurant should apply on LI-35 (loan application) and send to DDM (PLI) alongwith policy document and premium receipt book. Second and subsequent loan is admissible after a year if the first loan is fully repaid. Loan interest @ 10% p.a is calculated on six monthly basis.