Income Tax Rebates Offered by Postal Life Insurance Plans(PLI)

• Reduce taxable income by up to Rs. 1,50,000 deduction under section 80C**
• Convenient payment options - annual, half-yearly, quarterly or monthly premium payments
• Do more with plans that offer pure protection, retirement planning and investment options

The postal life insurance scheme was launched it the year 1884. It was initially created for postal employees and was later extended to other government and semi-government employees including employees of defence services, government-aided educational institutions, public sector undertakings, paramilitary forces, Reserve Bank of India, nationalised banks, financial institutions, etc. The insurance is easily accessible since it is offered by a wide network of post offices. The policies are purchased by a huge number of government employees for the death, maturity and tax benefits offered.

Types of plans offered under Postal Life Insurance

Six plans are available under Postal Life Insurance:

1. Endowment Assurance (Santosh)
2. Whole Life Assurance (Suraksha)
3. Anticipated Endowment Assurance (Sumangal)
4. Convertible Whole Life Assurance (Suvidha)
5. Joint Life Assurance (Yugal Suraksha)
6. Children Policy (Bal Jeevan Bima)

Important features and benefits of Postal Life Insurance plans

Listed below are the features and benefits found under each of the earlier-mentioned plans:

• Upon the death of the life assured, a death benefit equal to the sum assured plus bonuses, if any, is payable to the beneficiary of the policy.
• If the life assured survives the policy term, a maturity benefit is paid to him/her.
• The minimum age at entry is 19 years and the maximum is 55 years, except in Anticipated Endowment Assurance plan where the maximum age at entry is 40 years.
• The sum assured options range from Rs.20,000 to Rs.50 lakh.
• Loans can be borrowed after completion of a predetermined time period.
• Policies can be surrendered after a specified period of time as mentioned in the policy.
• The plan offers accrued bonuses along with the benefits.
• The premium payment modes available are – yearly, half-yearly and monthly.
• All plan types require medical examination.
• The premiums payable are low and the bonuses offered are high.

Tax rebate available on Postal Life Insurance

The tax rebates available on Postal Life Insurance policies under section 80C are as follows:

• Policies issued on or before 31.03.2012 qualify for tax deduction not exceeding 20% of the sum assured.
• Policies issued on or before 01.04.2012 qualify for tax deduction not exceeding 10% of the sum assured.