Postal Life Insurance (PLI) is the oldest life insurance policy in India, which was launched in February 1884. Rural Postal Life Insurance (RPLI) was introduced in 1995 to provide life insurance cover to people in the rural areas. This scheme has been successful, with over 23.51 million policies until March 31, 2015, mainly because of the extensive network of post offices in rural areas.
There are 6 types of policies under the RPLI, similar to the PLI policies. They are:
- Whole Life Assurance (Grama Suraksha)
- Convertible Whole Life Assurance (Grama Suvidha)
- Endowment Assurance (Grama Santosh)
- Anticipated Endowment Assurance (Grama Sumangal)
- 10-year RPLI (Grama Priya)
- Children’s Policy (Bal Jeevan Bima)
Eligibility Criteria for Bal Jeevan Bima RPLI
To get a children’s policy under the RPLI, you need to meet the following criteria:
|Minimum age of child||5 years|
|Maximum age of child||20 years|
|Location||Residing in rural parts of India (i.e. outside the municipality limits)|
|Maximum children per family||2|
|Maximum age of the primary policyholder||Less than 45 years|
Features of Bal Jeevan Bima RPLI
The RPLI schemes are not restricted to government employees like the PLI schemes. The main objective of the Bal Jeevan Bima scheme is to provide insurance cover to children of persons who already have an RPLI policy. The following are the main features of the children’s policy under the RPLI:
|Plan type||Life Insurance cover|
|Policy account||Dependent on primary policyholder|
|Premium payment term||Monthly, Quarterly, Half-yearly, Annually|
|Minimum premium||Rs. 5.92 for a policy term of 20 years|
|Maximum premium||Rs. 18.88 for a policy term of 5 years|
|Maximum sum assured||Rs. 3 lakh or equivalent to the sum assured of the main policyholder, whichever is less|
|Loan on policy||Not available|
|Intermediate withdrawal||Allowed after 5 years if all premiums are paid up till then.|
|Bonus payments||Same as Endowment Policy|
|Surrender terms||Policy can be surrendered after 60 months (5 years)|
Benefits of Bal Jeevan Bima RPLI
The reason why Bal Jeevan Bima (Children Policy) of the RPLI is highly recommended for the rural populace are:
- Accessibility: The policy is held with the post offices, which makes is easy to access. You can also transfer it from one post office to another easily. The premium can be paid at post offices with cash or cheque.
- Low premiums: The premium amounts are very low compared to the sum assured, starting from just Rs. 5.92. The premium amounts increases as the policy tenure goes down. For example,
- Nominee changes: You can change the nominees any time during the policy tenure.
- Policy renewal: The policy can be renewed for up to 2 times if it lapses. If the policy is less than 3 years old, it lapses after 6 unpaid premiums, and if the policy is more than 3 years old, it lapses after 12 unpaid premiums.
- Duplicate Policy Bond: If the original policy document is lost, torn, burnt or mutilated, a duplicate policy bond will be issued.
How Bal Jeevan Bima RPLI Works
To insure the life of your child, you can apply for a Bal Jeevan Bima RPLI policy at the post office. The policy will be in the name of a parent – father or mother – even though the primary beneficiary is the child. At the most 2 children of a family can be enrolled under the Bal Jeevan Bima policy. If a parent already has a Whole Life or Endowment Policy for a sum assured that is more than the amount of the Children Policy, then they can add on the Children Policy to their policy. Once the policy is bought, the parent or the primary policyholder is responsible for payment of premiums.
Medical examination of the child is not mandatory to take this policy, but the child should be healthy on the day of application for the policy. If the principal policyholder dies, the premiums do not need to be paid. The child will receive the sum assured along with bonus at the time of maturity. If the child dies before the end of the policy term, the amount shall be paid to the principal policyholder.
If the policyholder is unable to pay premiums due to a natural calamity such as earthquake, flood or drought in their area of residence, they do not have to pay any interest or fine as late payments charges for up to 12 months from the time of the calamity.
GST of 18% is applicable on life insurance effective from the 1st of July, 2017