RPLI Overview

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

What is RPLI?

RPLI stands for Rural Postal Life Insurance.

RPLI is an extension of PLI to rural areas.

RPLI contains a set of insurance schemes offered by the Post Office to the people living in rural areas.

History of RPLI

RPLI was introduced back in 24-March-1995.

Back in 1993, the Government of India observed that only 22% of the insurable population was insured.

So, the Government has decided to extend the coverage of Postal Life Insurance (PLI) to rural areas.

The main objective of the RPLI is to

• provide life insurance cover to the rural public

• benefit weaker sections and women workers

• spread insurance awareness among the rural population

Types of RPLI Policies

RPLI offers the following 6 types of insurance policies:

1. Whole Life Assurance (Gram Suraksha)

2. Endowment Assurance (Gram Santosh)

3. Convertible Whole Life Assurance (Gram Suvidha)

4. Anticipated Endowment Assurance (Gram Sumangal) - Money back

5. 10 Years RPLI (Gram Priya) - Money back

6. Children Policy (Gram Bal Jeevan Bima)

Eligibility

RPLI is only for people living within the boundaries of a rural area.

It doesn't matter whether you work in Government, Private, Agriculture, Business, Self-employed or daily wage worker.

If you live in a rural area and you have an income, then you can purchase an RPLI policy at a nearby Post Office.

Features of RPLI

• Safe investment

• Guaranteed returns

• Backed by the Government of India

• Income tax benefits

• Compared to other Insurance providers, RPLI 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

The income tax benefits of RPLI policy are same as that of the PLI policy.

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

Old Tax System:

Premium:

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

Returns:

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:

Premium:

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

Returns:

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 Amount

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

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

Minimum amount - Rs. 10,000

Maximum amount - Rs. 10 Lakhs

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

Whether you have one policy or more than one policy, the combined sum assured amount should not exceed Rs. 10 Lakhs. Aso, the combined sum assured amount should be at least Rs. 10,000.

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

For example, you can take a sum assured amount of Rs. 20,000, Rs. 30,000, Rs. 40,000, etc.

Premium Payment Methods

You can pay the premium of your RPLI 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 the 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

• Quarterly

• Half-yearly

• Yearly

Loan Facility

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

The following table lists the policy types and loan eligibility.

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 the premiums, then you can pay the pending premium amount 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 an RPLI policy is a process in which 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.

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 in a loss of money.

Duplicate Policy Bond

Duplicate policy bond option is available in RPLI.

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 any bonus accumulated till the day of your death will be paid to your nominees or legal heirs.

Nomination

Nomination facility is available in RPLI policy.

Also, you can change the nomination any time during the policy term.