EPFO: If you’re a Life Insurance Corporation of India (LIC) policyholder and sometimes find it difficult to manage the money to pay premiums, there’s a good option for you. The EPFO allows its members to pay LIC premiums directly from their EPF account. This reduces the risk of policy lapse due to temporary financial hardship.
According to EPFO rules, under paragraph 68(DD) of the EPF scheme, members can pay LIC premiums from their EPF accounts. This facility can be used both when purchasing a new LIC policy and for future premium payments. This option can serve as a safety net when needed.
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Who can use this facility?
You should be an EPFO member and your EPF account should be active.
There should be a balance equal to at least two months’ salary in the EPF account.
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The LIC policy should be in your own name (this facility is not available for policies in the name of spouse or children.)
The policy should be of LIC only and not of any private insurance company.
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How much amount can be withdrawn from EPF?
Only the amount required for premium payments can be withdrawn from your EPF account. This amount is directly deducted from your EPF balance, thus impacting your retirement fund. This facility can be used once a year, and withdrawals are not permitted to exceed the premium amount.
How to pay LIC premium from EPF?
Submit Form-14 to initiate the process.
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Visit the EPFO website and log in with your UAN and password.
Go to the KYC section and select the LIC policy option.
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Enter your LIC policy number and required details.
Submit the information for verification.
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Once the policy is linked, the premium will be automatically deducted from the EPF account on the due date.
What are the benefits of this feature?
Reduced risk of delay in paying premium.
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LIC policy prevents lapse.
There is no need to take a loan in an emergency.
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The entire process is online, no need to visit any office.
What things should be kept in mind?
This facility is only for LIC policies.
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Usually applicable for annual premiums, not for quarterly or half-yearly payments.
Providing incorrect documents or information may result in the request being rejected.
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KYC like Aadhaar, PAN and bank details must be updated.
Should you use this option?
Paying LIC premiums through EPF can be very helpful during financial difficulties. However, it’s best to use it as a backup option rather than making it a regular habit, so that your retirement savings are protected.