Postal Life Convertible Whole Life Assurance (Suvidha) Plan

The CWLA, or Convertible Whole Life Assurance policy, also known as Suvidha, is a unique investment-cum-life insurance policy that combines the features of both “Whole Life Assurance (Suraksha)” and “Endowment Assurance (Santosh)” policies. This policy is designed for individuals who find it challenging to choose between the two aforementioned types of insurance.

The scheme begins with the characteristics of a “Whole Life Assurance (Suraksha)” policy, offering long-term life insurance coverage. However, what sets it apart is the flexibility it provides after 5 years. Policyholders have the option to convert it into an “Endowment Assurance (Santosh)” policy during a specified window of 6 years from the policy’s initiation.

If a policyholder opts not to convert within this 6-year timeframe, the policy continues as a “Whole Life Assurance (Suraksha).” This flexibility allows individuals to tailor their insurance coverage based on their evolving financial needs and preferences, providing a comprehensive and adaptable solution for both protection and savings.

Here are the salient features and benefits of the Convertible Whole Life Assurance policy. 

Two Sum Insured Options:

• Minimum Sum Assured: Rs. 20,000

This is the minimum amount that the insurance policy will pay out in the event of the policyholder’s death. The sum assured is the guaranteed amount that the beneficiaries will receive.

• Maximum Sum Assured: Rs. 50 lakhs

This is the maximum amount that the insurance policy will pay out in the event of the policyholder’s death. It represents the highest level of coverage that can be obtained under the Convertible Whole Life Assurance policy.

Death Benefit:

if the policyholder passes away during the policy term, the beneficiaries (nominees or legal heirs) are entitled to receive the death benefit. The death benefit typically consists of the sum assured amount along with any bonuses that may have accumulated up to the date of the insured’s death.

Convertible Option:

The policy allows the option to convert into an Endowment Assurance after a specified period. In this case, the conversion is permitted after 5 years but not later than 6 years from the policy’s inception. If the policyholder chooses not to convert the policy within the specified time frame, the policy will continue as a Whole Life Assurance. This means that it will remain in force for the entire lifetime of the insured, with a death benefit payable to the beneficiaries upon the death of the policyholder.

Loan Facility:

The Convertible Whole Life Assurance policy offers a loan facility after 4 years, which means that policyholders have the option to take a loan against the cash value of their policy after the policy has been in force for a specified period, which in this case is four years. This waiting period is a common feature to ensure that there is sufficient time for the policy to accumulate a cash value.

Surrender Facility:

If a Convertible Whole Life Assurance policy allows surrender after 3 years, it means that the policyholder has the option to terminate the policy and receive a surrender value after the policy has been in force for at least three years. If the policyholder decides to surrender the policy, there will no longer be a death benefit payable to beneficiaries.

Bonus Rates:

The last declared bonus for the Convertible Whole Life Assurance (WLA) policy, if not converted to Endowment Assurance, is ₹76 per ₹1000 of the sum assured per year. This bonus is a share of the profits earned by the insurance company and is typically declared annually. Policyholders need to note that the bonus applies to the WLA policy and may have an impact on the overall policy value, especially if the policy is held for an extended period without conversion.