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Life Insurance

Post Office Life Insurance vs LIC (Understand the key differences)

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Post Office Life Insurance vs LIC (Understand the key differences)

When you think about a government-backed life insurance scheme for yourself, LIC and Post Office Life Insurance schemes stand out immediately.

Both LIC and PLI offer a wide range of insurance products to choose from. You may be wondering if you should opt for a LIC policy or a PLI policy. This article will give you clarity by highlighting the benefits, features, and distinctions between LIC and PLI policies. So, let us begin.

Lets us check out a few investigative differences between Post office Life insurance vs LIC schemes

Differences between Post Office Life Insurance vs LIC schemes

Postal Life Insurance (PLI)Life Insurance Corporation of India (LIC)
Plan TypesPLI offers conventional life insurance schemes that provide assured sum + accrued bonus.LIC offers all kinds of insurance products and schemes, including market linked investment plans as well as retirement oriented plans and schemes.
EligibilityAll Indians are eligible for their plans.Provides policies to each and every citizen of India.
Maximum age limit for people opting for PLI’s policies is 55 years.Maximum age limit for people opting for LIC policies is 75 years.
Age limit
Health plansPLI does not provide health insurance plans.LIC offers various health insurance plans to its customers.
Plans such as LIC’s Cancer cover and Jeevan Arogya are just 2 of LIC’s many health plans.
Sum assuredPLI offers a maximum sum assured up to Rs 50 LakhsThere is no Limitation to the assured sum. The policyholder can decide on the coverage according to his needs.
Coverage customizationPLI do not have additional ridders that can customize a person’s insurance plan.LIC offers a vast range of optional add-on riders that can help you expand your coverage accordingly
Lic’s New Critical Illness Rider.
LIC’s Accidental Benefit Rider.
LIC’s Accidental Death and Disability
LIC’s New Term Assurance Rider
BonusAvailableAvailable
PremiumThe premium cost of PLI’s policies are lower when compared to LIC.The premium cost of LIC is slightly higher compared to PLI.
You also get a discount of 2% if you pay advance premium of 12 months
How to avail policy?You can only purchase the policies by visiting the post office branch directly.LIC policies can be bought by visiting their branches, online as well as through agents.
Premium payment modePremium payment can be done by visiting the Postal Office branch only.Premium payment can be done through visiting s LIC branch, LIC collection centers, and even online on their website.

Now, let us quickly dive into the plans and schemes offered by Postal Life Insurance (PLI) And Life Corporation of India (LIC).

Plans offered by PLI

Type of plan

Name of the plan

Whole life insurance plan

  • PLI Suvidha (convertible whole Life plan)
  • PLI Suraksha

Money back insurance plan

PLI Sumangal

Endowment insurance plan

PLI Santosh

Joint life insurance plan

PLI Yugal Suraksha

Child insurance plan

PLI Bal Jeevan Bima

Plans offered by LIC

Type of plan

Name of the plan

Whole insurance plan

LIC Jeevan Umang

Term life insurance plan

  • LIC Anmol Jeevan
  • LIC  Jeevan Amar

Endowment insurance plan

  • LIC Single Premium Endowment Plan
  • LIC Jeevan Rakshak
  • LIC Limited Premium Endowment Plan
  • LIC Jeevan Lakshya
  • LIC Jeevan Pragati
  • LIC Jeevan Labh
  • LIC Aadhar Shila
  • LIC Aadhar Stambh

Unit linked plan

LIC New Endowment Plan

Pension plans

  •  LIC New Jeevan Nidhi
  • Pradhan Mantri Vaya Vandana Yojana

Money back insurance plan

  • LIC New Money Back Plan – 20 years
  • LIC New Money Back Plan – 25 years
  • LIC New Children’s Money Back Plan
  • LIC Jeevan Tarun
  • LIC Bima Shree
  • LIC Jeevan Shiromani

What should you opt for?

The plan that would be best suitable for you would ultimately depend on your requirements and needs. However, we could give you some suggestions.

  • If you are eligible for Postal Life Insurance Plan and wish to opt for good coverage at nominal rates, you can opt for a PLI policy.
  • If you are interested in investing in a unit-linked plan, retirement, or a term insurance plan then LIC may be a prudent choice.
  • Further, If you want a policy that provides the highest coverage, you may consider a LIC policy, as the maximum coverage via PLI is Rs.50 Lakhs.
  • If you want a health plan, LIC also has you covered.

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Insurance

Oldest insurance companies in India

Oldest insurance companies in India (From 1818-1938)

The history of insurance can be traced back to ancient times. The first forms of insurance were of Indian and Babylonian origin. Insurance has come a long way from the Babylonian bottomry contracts to the sophisticated insurance companies of the modern age.

That being said, have you ever wondered about the oldest insurance companies in India? Well, in this article we will take you back in time and talk about the oldest insurance companies in India.

The Oriental Life Insurance Company (1818)

Formal insurance in India was birthed during the British ruled era. The Oriental Life Insurance Company was the first insurance company formed in India. It was started by Europeans in Calcutta.

The company was established to cater to the needs of the Europeans only, and the Indian natives were insured by the company.

Initially, all the insurance companies established in that period were only formulated with the intention of covering only European natives. However, after the distinguished efforts of Shri. Babu Muttylal Seal and many others, insurance companies started insuring Indian lives.

However, heavy premium charges were levied if the policyholder was an Indian, making it unfair.

Bombay Mutual Life Assurance Society (1871)

Bombay Mutual Life Assurance Society was the first Indian life insurance company formed in India with the objective of covering Indian lives at normal standard rates.

Postal Life Insurance (PLI)

Postal Life Insurance was introduced by the government on 1st February 1884. Its objective was to provide welfare schemes to benefit the postal employees and later the plan also extended to the employees of the telegraph department. In 1894, Post life insurance also provided life insurance coverage to the female employees of the P&T department.

National Insurance Company (1906)

National Insurance Company is the oldest existing general insurance company in India. It was incorporated in Kolkata on 5th December 1906 by Gordhandas Dutia and Jeevan Das Dutia. After its nationalization in 1972, NICL operates as a subsidiary under The General Insurance Corporation of India (GIC)

Indian Mercantile insurance Company (1919)

The Indian Mercantile insurance company was formed on 21 August 1919. It is currently in business for the last 102 years and many of its operations are active.
It is registered In Mumbai and its registered office is at Indian Mercantile Chambers, Nicol Road, Ballard Estate, Mumbai- 400001.

United India Insurance company (1938)

United India is a leading general insurance company formed In 1938 and was nationalized in 1972. It is wholly owned by the government of India and its headquarters is in Chennai.

Hindustan Co-operatives (1907)

Hindustan co-operatives was incorporated in the house of world-renowned poet Shri Rabindranath Tagore in 1907, in Calcutta.

Other Old Insurance Companies

Other Insurance companies incorporated in the pre-independence era are as follows

  • Bharat Insurance Company (1896)
  • Co-operative Assurance (1906)
  • Swadeshi Life (later Bombay Life)
  • Sahyadri Insurance (Merged into LIC, 1986)

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Insurance Policy cancellation letter (With a sample letter)

letter

Insurance Policy Cancellation Letter (Sample Letter)

Sometimes we may end up choosing an insurance policy that may not cover all our requirements. In that event, we may want to cancel that policy and upgrade to a better one. Let us talk about this process in detail.

In this article, we will tell you about an insurance cancellation letter and how you can write one simply and easily. Further, we will also show you a sample insurance cancellation letter for your reference.

Things You Should Know

1.) Free Look Period

While issuing insurance policies, insurance companies generally provide a free look period. If the policyholder is not satisfied with the policy he may choose to terminate his policy within the free look period. This free look period is usually anywhere between 15-30 days.

If you choose to cancel your policy within this free look period you will receive up to 100% of your premium. However, you shall have to pay any cost that the insurance company may have spent on any stamp duty or medical tests.

2.) Policy Cancellation After Your Free Look Period

  • You can also cancel your insurance policy after the free look period, but you will not receive your entire premium.
  • If you cancel your insurance policy within a month of the free look period you will be entitled to receive up to 75% of your premium paid.
  • If you cancel your insurance policy within 3 months after the completion of the free look period, you will be entitled to receive 50% of your premium.
  • If you cancel your insurance policy within 6 months of the free look period, you shall be entitled to 25% of your premium paid.
  • If you cancel your policy after 6 months of the free look period, you will not receive any refund of your premium paid.

Cancellation Process

Step 1: Fill the cancellation form

Insurance companies will provide you a standard health insurance cancellation form. Kindly make sure to fill the form correctly with valid information, mentioning policy details such as date of the policy, policy number, name of the policyholder, etc. You will also have to mention the reason for termination.

Step 2: Insurance company receives your request

Once the insurance company has received your cancellation request, they will get in touch with you shortly. The insurance company will inquire about the reason for the cancellation and try to provide you a resolution. However, if you have made up your mind about canceling the policy, the cancellation process will be initiated by the company and you will get your refund.

Insurance Policy Cancellation Letter

Steps to writing a cancellation letter

  • Step 1: Call your insurance company and get the correct contact details and email address of the cancellation department.
  • Step 2: Write a letter as following (example)

 

Sample Letter

 

 

Ram Kapur,
B04 Ganpat Apartments,
Shivaji Park,
Mumbai-400016,
Date 12-03-21

To,
The Claim Settlement Department,
HDFC ERGO General Insurance Company,

[Their full address]

Sub: Cancellation of insurance policy (Policy No xxxxxxxxxx)

Respected Sir/ Madam,

I, Ram Kapur, am writing you this letter to formally submit my request for the cancellation of my health insurance policy (Policy no xxxxxxx) with HDFC ERGO. The effective date for canceling the policy is 13-03-21. Please stop debiting any charges for the same. Further, kindly return any unused premium to the following bank account (mention your bank details).

Request you to send me the written confirmation of cancellation of the policy ASAP. Please do not hesitate to contact me regarding this matter. I look forward to your prompt attention on the same.

Yours sincerely,

Ram Kapur
Contact No (——-)

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Insurance for job loss (Meaning, Benefits and Workings)

Insurance for job loss (Meaning, Benefits and Workings)

Life is uncertain, one can never predict the future. Even specialized world-class analysts could not predict the black swan event of the global pandemic that is now known as the COVID-19 pandemic.
Millions of people during these times faced tremendous difficulties and millions of people all around the world lost their jobs.

In fact, according to a report of the National Statistical Office (NSO), India’s GDP was adversely affected due to the pandemic resulting in a sharp decline of 23.9% in the 1st quarter of 2020.

One must be cognizant of the harsh fact that anyone can lose their job and consider looking into insurance for job loss. A job loss insurance policy can provide the cushion that you require during difficult times.

Let us discuss the following:

  • What is job insurance?
  • Job insurance in India?
  • How does job insurance cover work?
  • Benefits of job insurance

What is job insurance?

Job insurance provides financial safety or security to the policyholder and his family for a specified period in case the policyholder loses their job.
The insurance company will pay the insured a sum assured if the policyholder loses his/her job due to reasons that are mentioned in the policy wordings.

Example

The policyholder may lose his job due to a certain critical illness or suffers from any kind of disability. The insurance company will compensate the policyholder for the same.

Job insurance in India

Insurance cover in India is not available as an independent policy yet. That being said, it can be taken as an additional rider on certain base policies.

Many insurance companies in India offer you job insurance cover along with a critical illness cover, personal accident cover, or even a home loan protection plan.

A job insurance cover is apt for you if you are the only earning member in your family, and want to mitigate any financial risks that you may have to face due to the loss of your job.

What risks are covered in a Job insurance cover?

Job insurance cover covers the following:

1) Removal from job

This cover provides financial cover in case the policyholder has lost his/her job.

2) Temporary suspension from employment

The cover will offer financial help to the policyholder in case the policyholder is suspended from his job due to specified reasons mentioned in the policy document.

3) Critical Illness

The insurance company will provide financial relief to the policyholder in case they have been diagnosed with a critical illness costing them their job (illness covered under the policy bond).

4) Loan EMI

The insurance company will pay the policyholder’s loan EMI up to a specified period providing the policyholder a breather while he looks for another job.

How does job insurance cover work?

  1. In case the policyholder loses his/her due to a valid reason, he must inform the insurance company about the incident immediately.
  2. The insurance company will appoint a claim assessor to inspect the case.
  3. Upon proper inspection, the insurance company will release the compensation sum to the policyholder.

Benefits of a job insurance Cover?

  1. Provides financial assistance to the policyholder in case of a job loss due to accident, chronic illness, any physical disability, etc.
  2. Protects the policyholder in case of a job loss due to termination or temporary suspension.
  3. Provides protection if the insured has a loan.
  4. Pre-medical tests are not mandatory while opting for this cover.

Eligibility for job loss insurance

Following is the eligibility criteria for job loss insurance:

  1. Individuals must have a fixed salaried income.
  2. Candidate should be employed in a registered company.
  3. This policy will not be provided to self-employed individuals.

What are the exclusions under job insurance cover?

The insurance company will not provide coverage under the following conditions:

  1. Non-compulsory or voluntary retirement from a job.
  2. Loss of job during the waiting period of the policy which is usually ranging from 30-90 days.
  3. Loss of job or termination due to poor performance.
  4. Termination due to any act of fraud or scam.
  5. Loss of job during the probation period.
  6. If the job is of contractual, casual, or temporary nature.

What are the steps to follow to claim Job insurance cover?

Step 1– In case of a job loss/ termination. The policyholder must immediately inform the insurance company about the same. The policyholder must write a formal letter providing the details about the incident attached along with proof of unemployment.

Step 2– The policyholder will be required to submit supporting documents to the insurance company to validate his claim.

Step 3– The insurance company will compensate the policyholder after a satisfactory inspection.

What are the documents that will be required in the claim process?

  • Singed and duly filled claim form needs to be submitted by the claimant.
  • Supporting documents as proof of unemployment.
  • Termination letter from the company.
  • Identification documents of the claimant.
  • Salary slips of previous months.
  • Form 16
  • Details about the claimant’s company in which he/she was employed.
  • Copy of policy documents.
  • Any other document requested by the insurance company.

List of job insurance plans

As mentioned earlier, job insurance is not available as an independent policy, it is available as an add-on cover along with certain policies.

Let us have a look at some of the plans that come with the benefit of a job insurance cover:

  1. Secure Mind by ICICI Lombard
  2. Home Suraksha Plan by HDFC ERGO
  3. Safe Loan Shield by Royal Sundaram

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