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Meaning of Postal Life Insurance Interest Rates on Loans

Published On Apr 27, 2023, Updated On May 02, 2023

The Government of India provides various benefits for life insurance policyholders to encourage individuals to secure their financial future. One such benefit includes postal life insurance. It helps the policyholders protect their loved ones in the event of their unexpected death and provides extra benefits such as a loan facility in case of any financial emergency. Therefore, the loans availed of by policyholders are subject to the PLI interest rate. Read on to know more about the postal life insurance interest rate in detail! 

Meaning of postal life insurance interest rates on loans

Meaning of Postal Life Insurance 

Postal life insurance is an initiative taken by the Indian government to provide life insurance protection to government and semi-government employees, including those of the Indian Post Office. Under this scheme, the policyholders can enjoy life insurance coverage, including loan benefits against the sum assured. The insured can avail themselves of a loan facility up to a percentage of the sum assured amount offered under this scheme. The postal life insurance loan facility lets the policyholders overcome the financial contingencies that may happen in the future with ease. 

What is Postal Life Insurance Interest Rate? 

Postal life insurance policyholders can avail themselves of a loan on their insurance plan after a minimum of 3–4 years. In addition, the policyholders may have to pay the PLI interest rate, which is charged at 10% per annum on a half-yearly basis. This means the interest rate has to be paid every six months. Listed below are a few key points that you should know about the postal life insurance interest rate. 

  • The interest rate on a PLI loan is calculated on a half-yearly basis. Therefore, the policyholders must have to pay the loan interest amount every six months before the due date. 
  • The pending payable interest rate will be included in the outstanding loan amount if the policyholder fails to pay the interest amount timely. Moreover, the PLI interest rate depends on the total outstanding loan amount. 
  • The insurance company will surrender a life insurance policy in case the policyholders fail to pay the interest amount three times consecutively. Henceforth, the insurer will use the surrender value to pay off the pending interest and the outstanding loan amount of the policyholder. Once the surrender process is completed, the policyholders will no longer be eligible for the PLI scheme benefits. 

Benefits of Availing of Loan Under Postal Life Insurance Scheme

The key benefits of taking a loan against your postal life insurance plan are outlined below. 

  • Since individuals are already covered under the PLI insurance scheme, it becomes easier for them to avail of loans against their life insurance. 
  • As this scheme is initiated for a weaker section of the economy, the PLI interest rate is comparatively more affordable than the other loan lenders. 
  • The overall process is quick and hassle-free. Therefore, the policyholders can easily avail of loans against their insurance plan. 
  • The loan can be taken to overcome any short-term financial contingencies. 

Eligibility Criteria for Availing of Loan Under Postal Life Insurance Scheme

The policyholders can avail themselves of a loan under the postal life insurance scheme under the following conditions: 

  • The policyholders can take two loans against their life insurance. 
  • You must have completed a minimum of 3 years of plan purchase to apply for a loan against endowment and joint life insurance. 
  • You can take a loan against whole life and convertible whole life assurance after a minimum period of 4 years. 
  • The policyholders can take a loan up to a maximum of a predetermined part of the surrender value calculated at the time of policy purchase. The minimum loan amount is Rs. 1000. 

Postal Life Insurance Interest Calculator 

The PLI interest rate calculator assists policyholders in calculating the total premium payable under the policy. In addition to this, the premium amount can be calculated on a monthly, quarterly, half-yearly, or annual basis. All you need to do is enter your details, such as the policyholder's age, the total sum assured of the plan, and the policy's term. 


Life insurance is an important financial asset that secures the future of your loved ones. The Indian government provides a postal life insurance policy for government and semi-government sector employees. In addition to providing insurance coverage, the scheme also provides loan benefits to the policyholders. 

Also Read: 

Meaning of Term Insurance Portability


This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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