PLI Overview

This page provides all the details you need to know about the introduction of Postal Life Insurance (PLI).


Table of Contents


What is PLI?

PLI stands for Postal Life Insurance.

PLI contains a set of insurance schemes offered by the Post Office.


History of PLI

PLI was introduced back in 01-Feb-1884.

Initially, it was started as an insurance scheme for the benefit of Postal employees.

In 1888, it got extended to the employees of the Telegraph Department. In 1894, it got extended to the female employees of Postal & Telegraph departments.

PLI is the oldest life insurance provider in India.


Types of PLI Policies

PLI offers the following 6 types of insurance policies: 

  1. Whole Life Assurance (Suraksha)

  2. Endowment Assurance (Santosh)

  3. Convertible Whole Life Assurance (Suvidha)

  4. Anticipated Endowment Assurance (Sumangal)

  5. Joint Life Assurance (Yugal Suraksha)

  6. Children Policy (Bal Jeevan Bima)



PLI is not for all the citizens of India.

Till Sep-2017, it was exclusively for the employees of Government and Semi-Government organisations (as given below).

From 19-Sep-2017, PLI has been extended to the employees of certain Private sectors (as given below).

The list of eligible employees in Government and Private sector organisations are given below.


Government & Semi-Government:

  • Central Government

  • Defense 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 on a 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 and educational institutes accredited by recognized bodies such as National Assessment and Accreditation Council, All India Council of Technical Education, Medical Council of India, etc.


Private Sector (from Sep-2017):

  • Employees (teaching/non-teaching staff) of all private educational institutions/schools/colleges etc. affiliated to recognized Boards (recognized by Centre /State Governments) of Secondary/ Senior Secondary education i.e. CBSE, ICSE, State Boards, Open Schools, etc.

  • Doctors (including Doctors pursuing Post Graduate degree courses through any Govt/Private Hospitals, Residents Doctors employed on contract/permanent basis in any Govt/Private Hospitals etc)

  • Engineers (including Engineers pursuing Master’s/Post Graduate degree after having passed GATE entrance test)

  • Management Consultants

  • Charted Accountants registered with Institute of Charted Accountants of India

  • Architects

  • Lawyers registered with Bar Council of India/States

  • Bankers working in Nationalised Banks and it's Associate Banks, Foreign Banks, Regional Rural Banks, Scheduled Commercial Banks including Private Sector Banks, etc.

  • Employees of listed companies of NSE (National Stock Exchange) and BSE (Bombay Stock Exchange) in IT, Banking & Finance, Healthcare/Pharma, Energy/Power, Telecom, Infrastructure Sector etc, where employees are covered for Provident Fund /Gratuity and/or their leave records are maintained by the establishment


Features of PLI

  • Safe investment

  • Guaranteed returns

  • Backed by the Government of India

  • Income tax benefits

  • Compared to other Insurance providers, PLI provides the highest returns (Bonus) with the lowest premium

  • You can convert the policy from one scheme to another scheme as per the rules

  • You can continue the policy even after leaving or retiring your service

  • You can activate the lapsed policy

  • You can get a duplicate policy bond if the original bond is lost

  • You can take a loan by pledging the policy

  • You can change nomination at any time


Income Tax Benefits

Effective 01-Apr-2020, the income tax benefits will depend upon whether you choose old tax system or new tax system.

Old Tax System:


The premium amount that you pay (up to Rs. 1.5 Lakhs) during the financial year will qualify for tax deduction under Section 80C of the Income Tax Act.

But, the eligible deduction amount will depend upon when you purchased the policy.

  • If you purchased the policy before 01-Apr-2012, then the eligible deduction amount will be a maximum of 20% of the Sum Assured amount

  • If you purchased the policy on or after 01-Apr-2012, then the eligible deduction amount will be a maximum of 10% of the Sum Assured amount 


The maturity amount, periodic returns from the money back policy and the death benefit amount are completely tax free. The surrender value is also tax free.


New Tax System:


No income tax benefits. The premium amount won't get any deduction benefits under Section 80C of the Income Tax Act.


The maturity amount, periodic returns from the money back policy and the death benefit amount are completely tax free. The surrender value is also tax free.


Sum Assured

Sum Assured is the total amount that you are insured for. This is the amount PLI policy guarantees to pay you upon maturity or your death before the maturity. It doesn't include any bonus.

The sum assured amount provided by PLI policies is given below.

Minimum amount - Rs. 20,000

Maximum amount - Rs. 50 Lakhs

Please note that the minimum and maximum sum assured amount mentioned above is for the combined limit of all the PLI policies you have.

Whether you have one policy or more than one policy, the combined sum assured amount should not exceed Rs. 50 Lakhs. Aso, the combined sum assured amount should be at least Rs. 20,000.

The sum assured amount can be taken in multiples of Rs. 10,000 after the minimum amount of Rs. 20,000.

For example, you can take a sum assured amount of Rs. 30,000, Rs. 40,000, Rs. 50,000, etc.


Premium Payment Methods

You can pay the premium of your PLI policy through one of the following methods.

  • You can pay the premium from your salary. Please check with your Employer for the arrangement

  • Premium can be paid by cash or cheque at any Post Office. Post Office provides "Premium Receipt Book" for the deposit of premium

  • Recently, there is an online premium paying facility in Post Office website


Premium Payment Frequency

You have the option of paying the premium amount in one of the following modes.

  • Monthly

  • Half-yearly

  • Yearly


Loan Facility

The loan facility is available in PLI. You can pledge your PLI policy bond and get a loan.

To be eligible for a loan, you should complete

  • at least 3 years for EA (Endowment Assurance) policy

  • at least 4 years for WLA (Whole Life Assurance) policy

The loan amount is calculated based on the pre-fixed value of the surrender value at the time of application.

The current interest rate is 10%. The interest amount is calculated on a six-monthly basis and it needs to be paid every 6 months.

Alternatively, you can pledge your policy bond at any Bank or Financial institution to get a loan.


Lapsed Policy

Your insurance policy will become inactive or lapsed if

  • you don't pay the premium for 6 months for a policy that is less than 3 years old

  • you don't pay the premium for 12 months for a policy that is more than 3 years old

You have the option of activating the lapsed policy. To activate, You need to pay the unpaid premium with a penalty. The penalty amount is Rs. 1 per hundred sum assured.

For example, you have a policy of Rs. 1 Lakh sum assured. If you forget to pay one month's premium, then you can pay the premium on the next month along with a fine of Rs. 1,000. (That is, Rs. 1 Lakh divided by Rs. 100).

You can activate the lapsed policy any time during the term, but at least one year before the maturity date.

You can activate a lapsed policy only 2 times during the entire term of the policy.


Surrendering Policy

Surrendering a policy is a process where you can choose to leave the scheme well before the maturity date.

In this process, you will get immediate benefits applicable on the day of leaving. This is called "surrender value" and it depends on the type and the term of the policy.

The following table lists the policy types and when they can be surrendered.

Policy Type When can you surrender?

 Whole Life Assurance (Suraksha)

 After 3 years

 Endowment Assurance (Santosh)

 After 3 years

 Anticipated Endowment Assurance (Sumangal)

 No surrender option

 Children Policy (Bal Jeevan Bima)

 After 5 years

Bonus will be taken into account for surrender value calculation only if the policy has completed at least 5 years.

Surrendering a policy will always result you in a loss of money.


Duplicate Policy Bond

Duplicate policy bond option is available in PLI.

You can apply for and get a duplicate policy bond if the original policy bond is lost, burnt, stolen, torn or mutilated.


Death of Policy Holder

Unfortunately, if you die during the term of the policy, then the entire sum assured amount and the accumulated bonus will be paid to your nominees or legal heirs.


Group Insurance

In addition to single insurance policies, PLI also provides a group insurance scheme for the Extra Departmental Employees (Gramin Dak Sevaks) of the Postal Department.