Meaning of Postal Life Insurance Interest Rates on Loans – Check Benefits & Eligibility

The PLI or Postal Life Insurance helps the policyholder to protect their loved ones in the event of their sudden demise. Further, these plans also provide extra benefits in the form of loan facilities to the insured to fulfill their emergency financial needs, like medical expenses or urgent need for home repair. Hence the loan amounts offered under PLIs are subject to the postal life insurance interest rate. Let us read more about the PLI meaning and the PLI interest rate in detail!

Meaning of Postal Life Insurance 

PLI, or Postal Life Insurance, is a government of India initiative introduced to offer easy and affordable life insurance protection to employees working in government and semi-government organizations, including the employees of India Post.

The PLI scheme allows the policyholders to enjoy life coverage, including the benefits of availing loans against the sum assured. The loan facility is available up to a certain percentage of the assured sum of your policy. With the PLI loan facility, policyholders can easily overcome the financial emergencies occurring in their lives.

What is the Postal Life Insurance Interest Rate? 

The postal life insurance or PLI scheme allows the policyholders to avail of loans against their insurance plan once the plan completes a minimum duration of 3 to 4 policy years. The loans are available against the PLI interest rate of 10% per annum on a semi-annual basis. Thus, the interest rate under PLI loans needs to be paid in six months.

Below are specific key points to be noted about the PLI or postal life insurance interest rate: 

• PLI loan interest rate is considered on a semi-annual basis. Hence, policyholders have to pay the amount of loan interest in six-months
• The remaining interest rate to be paid is included in the outstanding loan in case the insured finds it challenging to pay the interest on time. Further, the interest rate of PLI is subject to the overall amount of the outstanding loan.
• Suppose the policyholder fails to pay the loan interest thrice in a row. In that case, the insurer or the post office will surrender the policy and use the surrender value to pay off the pending interest as well as the outstanding loan amount. After the completion of the surrender process, the policyholder will no longer be eligible for any other benefits of the PLI scheme.

Benefits of Availing Loans Under PLI Schemes

The key benefits of availing a loan against your PLI or postal life insurance are mentioned below: 

• Individuals covered under PLIs can easily get loans against their life insurance
• PLIs were designed for the economically weak sections of society. Hence, the PLI interest rates are reasonable as compared to other lenders
• The process of availing loans under PLI is fast and hassle-free, which makes it easy for the policyholders to avail loans against their insurance plan
• You can avail of a loan against PLI to overcome any short-term financial crisis

Eligibility for Availing of Loan Under PLI Scheme

The PLI scheme allows the policyholders to avail of a loan under the following conditions: 

• The policyholders under PLIs can avail of loans twice during their life insurance policy tenure
• The policy must complete 3 years of minimum tenure before the policyholder can apply for a loan against endowment policies and joint life insurance policies
• The insured can avail of a loan against his/her whole life and convertible whole life assurance plans once it completes a minimum of 4 years term
• The insured can avail of a loan of up to the maximum surrender value, which is calculated at the time of buying the policy, while the minimum PLI loan amount is INR 1000

Postal Life Insurance (PLI) Interest Calculator 

The PLI interest rate calculator is an online tool that can be used by the insured free of cost to calculate the total premium that the policyholder has to pay under the policy. Further, the PLI loan calculator can be used to calculate the premium amount on a monthly, quarterly, semi-annual, or annual basis. The policyholder needs to enter specific details like the policyholder’s age, sum assured, policy term, etc., to calculate the interest rate using the plan calculator.