What is Rural Postal Life Insurance (RPLI)?
Rural Postal Life Insurance (RPLI) is effectively the rural life insurance arm of Postal Life Insurance. The plans, features and services are generally the same, the only difference between Postal Life insurance and Rural Postal Life Insurance is that PLI operates in urban areas and RPLI operates in rural areas. RPLI came into existence in 1995 on the back of recommendations made by the noteworthy Malhotra Committee in 1993.
The Malhotra committee also made a host of other important observations and recommendations in 1993, some of them were; allowing the entry of private companies in the insurance sector, advising towards the formation of the IRDAI, and making other important insurance recommendations. The Department of Posts took the recommendations of the Malhotra committee pertaining to increasing the penetration of insurance in rural areas in India and began operations in 1995. As of 2021, RPLI has been immensely successful, having issued policies worth ₹1.27 Lakh Crores, and selling over 2.18 Crore policies.
Let us now talk about some of the noteworthy aspects of RPLI, such as:
- Importance of RPLI
- Features and benefits of RPLI
- Schemes under RPLI
- Eligibility and Documents required
Importance of RPLI
- Increasing rural insurance penetration: RPLI has been instrumental in increasing life insurance penetration in India through its extensive efforts to push the life insurance product in rural India. The insurance penetration in rural India was relatively low in the early 90s, now as of 2023 every one out of five rural persons has a life insurance coverage.
- Low premiums: The premium structure and rates under RPLI are designed to be extremely affordable, with the intention to bring every rural person under the umbrella of life insurance.
- Increase in employment: As RPLI was pushed to rural areas of the nation, this led to an increase in the requirement for staff, which resulted in many employment opportunities for the rural population.
Features and benefits of RPLI
- Loan against policies: RPLI provides policyholders with the ability to mortgage their life insurance policy and get a loan against it. This feature could really assist the policyholder during times of cash crunch.
- Nomination: A Nomination facility is provided under every RPLI policy. Further, a policyholder can change or modify his nomination by filling up a fresh nomination form.
- No need for a medical test: Policyholders do not need to undergo a medical test in order to purchase an RPLI policy.
- Tax benefits under 80C: Up to ₹1.5 Lakhs worth of premiums paid per year is eligible for tax deduction under Section 80C of the I.T Act.
- Policy switching: Certain RPLI policies have the added benefit and ability to be switched from one RPLI policy to another. This switching is generally eligible for only certain types of policies and after a certain period has passed.
- Flexible premium payments: Under RPLI, the policyholder has the option to pay his premium as per his convenience, he can either chose a monthly, quarterly, half yearly, or even yearly premium payment terms.
Schemes under RPLI
RPLI currently offers 6 policies, they are:
- Whole Life Assurance (Gram Suraksha)
- 10 Year RPLI (Gram Priya)
- Anticipated Endowment Assurance (Gram Sumangal)
- Children Policy (Bal Jeevan Bima)
- Endowment Assurance (Gram Santosh)
- Convertible Whole Life Assurance (Gram Suvidha)
We will briefly talk about the most important aspects and features of each of the above policies.
- 1.) Whole Life Assurance (Gram Suraksha): Under this policy, the policyholder or his beneficiary will be paid the sum assured along with the bonus accrued when the policyholder reaches the age of 80. If the policyholder passes away before the age of 80, the policy beneficiary will be eligible to receive the policy benefits. The maximum sum assured under this policy is ₹10 Lakhs.
- 2.) 10 Year RPLI (Gram Priya): The Gram Priya RPLI policy is an endowment policy where the policyholder is provided with a life cover as well as regular survival bonus payments which are paid to him after 4 years.
- 3.) Anticipated Endowment Assurance (Gram Sumangal): This is a relatively long term policy where the survival benefits are paid to the policyholder periodically. This policy may seem attractive for someone looking for regular income inflow from their life insurance policy.
- 4.) Children Policy (Bal Jeevan Bima): Under this policy, up to 2 children of the policyholder are covered against the death of the policyholder. For insurance, if the policyholder dies, PLI will disburse the policy benefits to the children of the policyholder.
- 5.) Endowment Assurance (Gram Santosh): The Gram Santosh RPLI policy is also a kind of endowment policy where the policyholder will to paid regular policy benefits when he or she attains the following age; 35 years, 40 years, 45 years, 50 years, 55 years, 58 years & 60 years of age. If the policyholder passes away before maturity, the policy beneficiary/nominee will receive the policy benefits along with any accrued bonus.
- 6.) Convertible Whole Life Assurance (Gram Suvidha): This policy has the flexibility to get converted from a whole life assurance policy to an endowment policy after 5 years. This policy can be surrendered after 3 years, and a loan can be taken on this policy after 4 years.
You can read more about RPLI and their plans here.
Eligibility and Documents required
The eligibility criteria for buying an RPLI policy is rather straight forward. Any person living under what would constitute as a rural area is eligible towards RPLI. Documents required to purchase a Rural Postal Life Insurance policy would be photo ID and address proof, such as:
- Aadhar Card
- Driving License
- Ration Card
- Voter ID