RPLI or Rural Postal Life Insurance was a sequel to the recommendations to the Official Committee for Reforms. The Government understood the need for insurance to reach the rural areas and decided to extend the coverage of life insurance to the rural areas via the post office from 24th March, 1995 as the post office has a vast network and the cost of operations are low. The main objective of the scheme is to provide insurance to the rural areas and to benefit the weaker section and women workers in rural areas. As of 31st March, 2015, Postal Life Insurance had over 23.51 million RPLI policies.
Plans Offered Under RPLI
Rural Postal Life Insurance offers the following plans:
- 10 year RPLI – Gram Priya
- Anticipated Endowment Assurance – Gram Sumangal
- Child Policy – Bal Jeevan Bima
- Convertible Whole Life Assurance – Gram Suvidha
- Endowment Assurance – Grama Santosh
- Whole Life Assurance – Gram Suraksha
Common Features of RPLI
The common features of plans under RPLI is as follows:
- Any resident in rural areas can apply for the RPLI policies.
- The minimum sum assured is Rs.10,000.
- The maximum sum assured is Rs.10 lakh.
- The maximum age for entry is 55 years for endowment and whole life plan but 45 years for others.
- All plans will need a compulsory medical examination.
- If you choose a non-medical policy, then the maximum sum assured is Rs.25,000 and the maximum age is 35 years for entry.
- If the applicant has no proof of age, then the maximum age limit allowed is 45 years.
Benefits of Rural Postal Life Insurance
The benefits of RPLI are as follows:
- There is a 100% security offered by the Government of India.
- The premium payment is low but the bonus offered is high.
- The insured can take loan against the policy. Policy, if Endowment, then it should complete 3 years and 4 years in the case of Whole Life Assurance.
- Insured can surrender can opt for conversion, assignment and paid-up value.
- The insurance policy can be easily transferred to any place in India for no charge.
- The interest on loan is payable every 6 months.
- Passbook facility is available.
- Pay recovery facility is available for institutions that have more than 20 policies.
- 1% rebate is offered for payment of 6 months premiums in advance.
- 2% rebate is offered for payment of 12 months premiums in advance.
- Nomination facility is also available.
- If the policy lapses for non-payment of premium, then it can be revived by paying the premiums due. Policy will lapse if 6 premiums are unpaid for a policy that has been in force for less than 3 years and 12 premiums if the policy has remained in force for over 3 years.
- The policy payment can be made through any post office across India.
- The claims are settled easily as the process is fully computerised.
- If the premium amount is more than Rs.20, then the premium payment can be made by cheque.
- You can change the nominee, if required.
- If the policy bond is lost, then a duplicate bond is issued.
- A Whole Life Assurance can be converted to Endowment Assurance and Endowment Assurance can be converted to other Endowment Assurance schemes as per the rules.
Tax Benefits of RPLI
The following are the tax benefits one can avail if he or she has taken a RPLI policy:
- Deduction under Section 80C for the premiums paid as per the Income Tax Act, 1961.
- The insured can also avail rebate under Section 88 of the IT Act.
GST of 18% is applicable on life insurance effective from the 1st of July, 2017