• Rural Postal Life Insurance Plans Tax Benefits

    Life Insurance
    • 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
    By Muktha | 19 Oct 2019

    The Rural Postal Life Insurance scheme was started in the year 1995 by the government after the Malhotra Committee made it known in 1994 that only 22% of the insurable population is insured. The government then took the initiative to popularise life insurance and also to increase insurance penetration. Thus, the Rural Postal Life Insurance scheme was created since it was believed that the Branch Postmasters hold a position of trust among the people and will hence be able to influence the rural public.

    Any individual residing in the rural regions of the country can purchase policies under the Rural Postal Life Insurance scheme. They are easily accessible since they are available at nearby post-offices and does not require one to visit a branch office of an insurance company. A major chunk of the country purchases plans under the Rural Postal Life Insurance scheme to avail benefits and bonuses.

    Types of plans offered under Rural Postal Life Insurance

    Listed below are the plans available under the Rural Postal Life Insurance scheme:

    1. Endowment Assurance (Grama Santosh)
    2. Whole Life Assurance (Grama Suraksha)
    3. Anticipated Endowment Assurance (Grama Sumangal)
    4. Anticipated Endowment Assurance (Gram Priya)
    5. Convertible Whole Life Assurance (Grama Suvidha)

    Important features and benefits of Rural Postal Life Insurance plans

    Here are the features and benefits offered under the scheme:

    • If the life assured individual expires during the policy term, the death benefit equal to the sum assured amount plus accumulated bonuses is payable to the nominee.
    • In case the individual survives the complete term of the policy, a maturity benefit is payable to him/her.
    • Individuals between ages 19 years and 55 years can avail Rural Postal Life Insurance policies. The maximum age at entry for the Gram Priya plan is 40 years.
    • Prospective policy buyers can choose a sum assured amount of minimum Rs.10,000 and maximum Rs.3 lakh.
    • Loans can be availed from the policy after a certain period, as mentioned in the policy, has been completed.
    • Along with the benefits offered, accumulated bonuses are also provided.
    • All plan types require a medical examination. Individuals who do not undergo a medical examination will not be permitted to opt for a sum assured amount more than Rs.25,000. Also, the maximum age at entry for such policies is 35 years.
    • The advantage of Rural Postal Life Insurance policies is that high returns are offered for low-cost policies.

    Tax benefits available on Rural Postal Life Insurance

    The details of the tax benefits available on Rural Postal Life Insurance policies are given below:

    • Life insurance policies that were issued on or before 31.03.2012 qualify for tax deduction under section 80C of the Income Tax Act, 1961. The maximum limit for such policies is 20% of the sum assured.
    • Life insurance policies that were issued on or before 01.04.2012 qualify for tax deduction under section 80C of the Income Tax Act, 1961. The maximum limit for such policies is 10% of the sum assured.

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