Postal Life Insurance Vs LIC: Which One is Best?

July 21, 2021

When one thinks of insurance policies by the Indian government, the first organization that comes to mind is Life Corporation of India (LIC). A lot of individuals might not be aware that the Department of Posts also offers life insurance under the name of Postal Life Insurance (PLI).

In fact, PLI is the oldest insurance service provider that was launched on February 1, 1884. One thing is to be noted that PLI has eligibility criteria under which only government officials or the individuals working in organizations associated with the government can be a part of the scheme.

On the other hand, LIC policies are available to every Indian citizen, thereby making it more popular among the Indian population.

Types of Policies Offered By Postal Life Insurance (PLI)

Postal Life Insurance offers multiple schemes to eligible individuals, with each having its unique features. These schemes include:

1. Whole Life Insurance (Suraksha)

This is the most widespread scheme in which the minimum sum assured is Rs. 20,000, whereas the maximum sum assured is Rs. 10 Lacs. You are eligible for this scheme after the completion of 19 years of your life and the maximum eligible age for this plan is 55 years.

The legal heir, assignee, or nominee receives the assured among and accrued bonus after the death of the insured individual.

2. Endowment Insurance (Santosh)

The qualification criteria for this plan are similar to that of Whole Life Insurance. Just like any other endowment policy, the policyholder receives the sum assured after maturity with the bonus. In the case of death, the nominee or heir receives the sum and bonus.

3. Convertible Whole Life Insurance (Suvidha)

It lies somewhere between Santosh and Suraksha plan. You have to convert the plan into endowment assurance after five years; otherwise, it will be treated as whole life assurance.

4. Anticipated Endowment Plan (Sumangal)

You can enjoy survival benefits periodically with this plan. The great thing about the scheme is that the nominee or the heir receives the full sum assured and bonus in case the policyholder dies. There is no effect of periodical benefits on the death benefits.

5. Joint Life Assurance (Yugal Suraksha)

If one of the partners is eligible for PLI, he or she can also include his/her partner in the plan as an insured individual.

There are also specialized schemes for physically handicapped individuals and children by PLI. For individuals living in rural areas, there is a separate set of plans, which include Grama Suraksha, Grama Suvidha, Gram Priya, Bal Jeevan Bima, and Grama Santosh.

Difference Between PLI and LIC

Through this table, we discuss some major differences between PLI and LIC to help choose the best insurance policy.

Postal Life Insurance Life Insurance Corporation of India
Eligibility The policies are offered only to employees of state or central governments or employees of Nationalized Banks, Government aided Educational Institutions, Universities, Local Bodies, Public Sector Undertakings, etc. Every Indian citizen is eligible for policies from LIC.
Bonus The insured individuals or their beneficiaries receive seven percent as a bonus or more. As per the current schemes, the rate of interest is in the range of four to five percent.
Sum Assured The PLI allows Rs. 50 lakhs as the maximum sum assured. With LIC, there is no limit to the maximum sum assured.
Premium payment You need to visit the nearest post office branch for paying the premium. Electronic clearance systems and online payments are other modes for premium payments. The premium payment can be done through the LIC branch, collection points, or even through an online mode of payment.
Premium rate The premium rates of most plans are cheaper than those offered by LIC. You can also get a rebate of two percent by paying a premium of 12 months in advance. There is also one percent rebate if the premium is paid in advance for six months. You have to pay a comparatively higher premium for LIC.
How to purchase You can purchase the policies only from the post offices. The policies can be purchased either through the agents or by visiting the LIC office. The company has recently introduced online term plans and pension plans.
Maximum age limit While purchasing the plan, the age of the individual should not be more than 55 years. The maximum age limit for choosing insurance policies is 75 years.

Both these insurance providers offer you tax deduction benefits as per Section 80C.


If you are eligible for postal life insurance, then it is surely a better option when compared to LIC. The reason a lot of individuals choose LIC policies over PLI is due to more popularity of the former organizations.

In case you or your family member is not associated with government or semi-government job, then you no option but to choose LIC policies. Well, you can also check life insurance policies from reputable, private companies. For this purpose, our policy comparison facility will make it easier for you to choose the best insurance policy.

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