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How To Pay LIC Premium Via EPF A/c? Is It Advisable To Do So?

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Even though the insurance market is still underpenetrated in the country, LIC's market share cannot be ignored given its high credibility and government backing. So, if you too have a LIC insurance policy against which you pay premium on a regular basis, here to your surprise you can also make the payment via your EPF account if you happen to be an employed individual. This method can be tapped upon in case you are short of funds at some point in time.

 

Let's discuss everything from how to make the premium payment via EPF towards LIC policy to whether or not is it advisable to tap this social security corpus:

The EPFO organisation administering the EPF or Employees' Provident Fund A/c on its website under the Claim Form has listed out various options and under it you can easily trace the one saying- 'Want my LIC Policy to be financed through my PF A/c' and for the same you need to Apply in Form 14.

Condition that shall grant you to make LIC premium payment via EPF

Condition that shall grant you to make LIC premium payment via EPF

Herein a condition that needs to be met in order for the process to go through smoothly is that at the time of placing such a request with the EPFO your EPF balance should be equal to 2 years LIC premium payable amount. Say if for a particular LIC you are making quarterly premium payment of Rs. 15000 that amounts to Rs. 60,000 on an annual basis (not considering GST here), the eligibility for the process to apply says that you should have at least Rs. 1.2 lakh in your EPF account when applying for LIC premium payment via EPF.

Also, you should be a EPF member or subscriber for at least 2 years before applying for such a scheme

Pointers to note when considering insurance premium payment via EPF
 

Pointers to note when considering insurance premium payment via EPF

The point worth noting is the process or facility of financing insurance policy via EPF can even be opted while buying an LIC policy or at a stage thereafter.

Further, once you apply for such a facility, your LIC and EPF account shall be interlinked

Note this payment facility via EPF is exclusively available for LIC policyholders or prospective buyers and cannot be exercised for premium payment of any other insurance company.

Remember this feature can also be chosen as a recurring facility as does the Form highlights - make periodical withdrawal of Rs ..from my Provident Fund account No...each time the premium falls due for payment and remit the same to the LIC of India.

Details required in Form 14 for LIC premium payment via EPF

Details required in Form 14 for LIC premium payment via EPF

1. Address of the branch office or unit of the Life Insurance Corporation where the policy account * Is/Is to-be maintained

2. Policy/Proposal No and date

3. Sum assured/proposed to be assured.4

4. Probable date of purchase of the policy.

5.Whether the proposal has been accepted and If so, by what date the first premium ls to paid;

6.Cost of the policy ( In the case of slngle payment policies }

7..Amount of yearly premia.

8. Due date (s) for payment of premium

9.Date of payment of last premium,

10. Whether age has been admitted.

11.Name (s) o( the nominee (s) under section} 39 of the Insurance Art, 1938

12.Guardian appointed under section 39 o{ the Insurance Act, 1938 In respect of minor nominee's, if any.

13.Details of any previous policy already assigned to the C B. T.

Remarks

Other than the above you would also need to declare that you have been the member of the Fund for a period of not less than two years which is the minimum period for being eligible for financing the Insurance policy from the Fund

Take on whether or not one should plunge into this EPF corpus for LIC premium payment

Take on whether or not one should plunge into this EPF corpus for LIC premium payment

Some of the LIC policies such as the term insurance policy cannot be ignore if you happen to be the sole breadwinner for the family and their continuance makes high sense, so in a case if you are short of funds amid the economic disruption currently, you can certainly dig into your EPF kitty. But remember this route should be tapped in an acute financial crisis as the purpose of EPF corpus is implicitly for your sunset years.

GoodReturns.in

Read more about: insurance premium lic epf
Story first published: Thursday, December 9, 2021, 22:10 [IST]
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