If you are an LIC policyholder and find it difficult to arrange funds for premium payments at times, there is a provision that could offer relief. The Employees’ Provident Fund Organisation (EPFO) allows
eligible members to pay LIC premiums directly from their EPF accounts, ensuring that policies do not lapse due to temporary financial constraints.
EPFO allows members to pay LIC policy premiums from their EPF account under Paragraph 68(DD) of the EPF Scheme. The facility can be used both while purchasing an LIC policy and for paying future premiums, offering policyholders a safety net during periods of cash shortage.
Who Is Eligible To Use This Facility?
To pay LIC premiums from your EPF account, the following conditions must be met:
- You must be an EPFO member with an active EPF account
- Your EPF account should have a minimum balance equal to at least two months’ wages
- The LIC policy must be in your own name (not in the name of a spouse or children)
- The policy must be issued by LIC only, not by any private insurance company
How Much Can Be Withdrawn From EPF?
You can withdraw only the amount required to pay the LIC premium. The withdrawn sum is deducted from your EPF balance, which means it will impact your retirement savings.
This facility can be used once every year for premium payment, but members are not permitted to withdraw more than the premium amount due.
Step-By-Step Process To Pay LIC Premium From EPF
To pay your LIC premium through your EPF account, follow these steps:
- Submit Form-14 to initiate the process
- Visit the EPFO website and log in using your UAN and password
- Go to the KYC section and select LIC policy
- Enter your LIC policy number and other required details
- Submit the information for verification
Once the policy is successfully linked, the premium amount will be automatically deducted from your EPF account on the due date.
Key Benefits Of Using EPF For LIC Premium Payments
- No risk of missing premium due dates
- Your LIC policy remains active and does not lapse
- No need to take loans during financial emergencies
- Fully online process with no office visits required
Important Points To Keep In Mind
- EPF is meant primarily for retirement savings, so avoid frequent withdrawals
- This facility applies only to LIC policies
- It is available only for annual premium payments, not for quarterly or half-yearly premiums
- Incorrect documents or details may lead to claim rejection
- KYC details such as Aadhaar, PAN, and bank information must be fully updated
Should You Use This Facility?
The option to pay LIC premiums from your EPF account can be extremely helpful during financial difficulties. However, it should be used as a backup option rather than a regular practice, to ensure that your retirement corpus remains intact.
With proper planning and timely action, you can safeguard both your insurance cover and long-term financial security.
What Is EPFO?
The Employees’ Provident Fund Organisation (EPFO) is a government body responsible for collecting, managing, and safeguarding provident fund contributions made by salaried employees. Its primary aim is to provide financial security after retirement.
EPFO was established in 1952 under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. It manages three key schemes:
- Employees’ Provident Fund (EPF)
- Employees’ Pension Scheme (EPS)
- Employees’ Deposit Linked Insurance (EDLI)
