Introduction:
Every family needs financial security these days. But, choosing the right life insurance plan in India can be confusing, especially with trusted options like Postal Life Insurance (PLI) and Life Insurance Corporation of India (LIC).Life insurance is not just a plan, it’s a protective shield. Both are government-backed insurance providers that offer financial security, savings, and peace of mind for millions of families.
In this article, we will do a detailed comparison of PLI vs LIC – features, benefits, premium rates, bonus, claim settlement, and which plan will be best for you.
What is Postal Life Insurance (PLI)?
Postal Life Insurance (PLI) was initially introduced in 1884, initially only for postal employees. But today, PLI plans have reached not only government and public sector employees but also people in rural areas, thanks to Rural Postal Life Insurance (RPLI).
Main Features of PLI:
- Managed by the Department of Posts, Government of India.
- Offers low premium rates and high bonus rates.
- Ideal for government employees, urban and rural people.
- Provides guaranteed returns with simple policy structures.
- Available through all post offices in India, making it easily accessible.
What is Life Insurance Corporation of India (LIC)?
The Life Insurance Corporation of India (LIC) was formed in 1956 and today it is India’s largest life insurance company. LIC covers every type of customer—salaried people, farmers, business owners, and professionals.
LIC offers a wide range of insurance products, including term plans, endowment plans, money-back policies, ULIPs, pension plans, and child plans. It’s a household name and one of the most trusted financial Intrument in India.
Main Features of LIC:
- Largest and oldest life insurer in India.
- Offers wide variety of life insurance plans.
- Strong claim settlement ratio (around 98.6%).
- Available through branches, agents, and online services.
- Provides both traditional and investment-linked policies.
Objective of PLI and LIC:
| Aspect | Postal Life Insurance (PLI) | Life Insurance Corporation (LIC) |
| Main Objective | To provide low-cost insurance and encourage savings among government and rural workers. | To spread life insurance to all citizens and mobilize savings for economic growth. |
| Target Audience | Government employees, public sector workers, and rural citizens. | All individuals, regardless of profession or location. |
Both aim to promote financial inclusion, but PLI focuses more on rural and government employees, while LIC serves the entire Indian population.
Types of Policies Offered
PLI Policy Types
- Whole Life Assurance (Suraksha) – This police will mature on age of 80 years of policy holder or on death of policy holder nominee will paid with maturity benefits.
- Endowment Assurance (Santosh) – This policy assured coverage for insurance with savings plan.
- Convertible Whole Life (Suvidha) – Can be converted into endowment assurance policy at any point. Initial Premium of this policy is low compared to other
- Anticipated Endowment (Sumangal) – Money-back plan.
- Joint Life Assurance (Yugal Suraksha) – This policy can be open in the name of joint insurant best for married couples.
- Children Policy (Bal Jeevan Bima) –This Policy was introduced for securing children’s future. And this is the only children policy can be open.
LIC Policy Types
- Term Plans – This Policy Provides full life cover for a specific term and can be an affordable premium. The nominee receives a death benefit if the policyholder dies during the policy term, with no maturity benefit.
- Endowment Plans – Like PLI this policy also provide combine benefit of insurance and savings. A lump sum is paid on maturity if the policyholder survives the term, or to the nominee upon the policyholder’s death.
- Money-Back Plans – This policy provides periodic payout to the insurant with death benefits and full maturity payout in case of insurant die.
- Pension Plans – This Policy is designed to provide a regular income after retirement, helping to secure financial stability post-retirement.
- ULIPs – This Policy plans combine insurance with investment, where a portion of the premium is invested in market-linked funds, potentially offering market-linked returns. Market-linked insurance and investment.
- Child Plans – This is a children policy it provides secure a child’s future needs, such as education and other expenses.
- Health Insurance Plans – This provides health insurance facility to the insurant during medical emergencies.
Premium and Bonus Comparison
- PLI Premiums: Lowest in the market because it’s run by the Government of India.
- PLI Bonuses: Among the highest — often ₹70–₹80 per ₹1000 sum assured annually.It differs from policy to policy.
- LIC Premiums: Slightly higher than PLI but offers greater flexibility and add-on benefits.
- LIC Bonuses: It depend on plan performance, but generally stable.
Example:
A 30-year-old buying a 20-year policy under PLI pays a lower premium than a similar LIC plan for the same coverage — making PLI more affordable for long-term savings.
Eligibility and Coverage
| Criteria | PLI | LIC |
| Eligibility | Govt. & semi-govt. employees, now extended to rural population via RPLI. | Open to all Indian citizens. |
| Maximum Sum Assured | ₹50 lakh | No fixed limit (based on income). |
| Entry Age | 19–55 years | 18–65 years (varies by plan). |
Claim Settlement and Customer Support
Both organizations have excellent claim settlement records:
- LIC: Around 98.6% claim settlement ratio.
- PLI: Around 95–98%, depending on the year.
Customer Service:
- LIC offers strong digital support, agents, and online services.
- PLI is improving online facilities through India Post’s portal (for premium payments, policy tracking, etc.).
For rural customers, PLI’s post office network provides unmatched accessibility and trust.
Tax Benefits
Both PLI and LIC offer tax benefits under the Income Tax Act, 1961:
- Section 80C: Premiums qualify for deductions up to ₹1.5 lakh.
- Section 10(10D): Maturity proceeds are tax-free.
Hence, whether you invest in PLI or LIC, both help in saving taxes while securing your family.
Which One Should You Choose?
Choose PLI if:
- You are a government or postal employee, psu employee, any graduate, any vocational qualifcaion.
- You live in rural areas can do RPLI.
- You want lower premiums and guaranteed returns.
- You prefer safe, old and traditional insurance plan.
Choose LIC if:
- You want to customized your plans for savings, investment, or retirement than LIC is best for you.
- You want to take higher coverage more than 50 lakhs
- You are a private employee or business owner.
- You prefer market-linked or pension options.
Conclusion: PLI vs LIC – Best Life Insurance in India
Postal Life Insurance (PLI) and Life Insurance Corporation of India (LIC) are both trusted and government-backed life insurance providers in India.
• PLI’s main focus is to provide affordable and simple insurance, especially for government employees and rural citizens.
• LIC offers plans for everyone across India, be it salaried or not, businessman or farmer.
PLI and RPLI have played a major role in rural development – making rural people aware about the importance of savings and insurance.
On the other hand, LIC has contributed to the economic growth of the country through its large network and investments.