Facing cash crunch and at the same time have to pay towards your life insurance policy which can be a daunting task amid such a situation, but if you are a service class individual working in the organized sector you are almost likely to have an EPF account and this can come as a big relief during such distressed times.
Here’s how EPFO can come as help when you are to pay for your insurance policy but do not have the liquidity to do so
In accordance with the Employees' Provident Fund Scheme, 1952, EPF subscribers can make the payment towards life insurance policy with policy being bought on his or her own life by taking advanced from one's EPF account.
How To Get EPF Advance For Paying Life Insurance Policy Premium?
So, as per the norms provided as part of the scheme, subscriber needs to apply for the financing from the EPFO for making insurance premium payment addressing the organisation's commissioner on the form and in the manner as specified by the commissioner. And once the receipt is received and verified, the commissioner or any officer delegated by him or her will make the payment to the LIC on behalf of the EPF subscriber against his or her policy for which the premium payment was outstanding.
Also, there is a condition that no such payment will be made unless the premium for the insurance policy is payable yearly.
Conditions for being eligible to get EPFO financing for insurance premium payment
Here are detailed the conditions upon fulfillment of which you will be able to get such an advance from provident fund managing entity:
1. For the premium payment to be made from the EPF kitty, contribution of the employee towards the account including interest should be just enough to make the premium payment. And in case where the payment needs to be paid towards the first premium, it should be sufficient to pay premium for 2 years.
2. Also, discretion of the commissioner as also the officer designated by him or her for the payment holds high significance. "No payment shall be made towards a policy unless it is legally assignable by the member to the Central Board," said the EPFF Scheme 1952.
3. Before making any payment in lieu of the subscriber's life insurance policy, the EPFO's commissioner will first satisfy himself that whatsoever there is no previous assignment of the policy and also the policy is free from all encumbrances.
4. Also, the EPF kitty shall not finance premium towards education endowment or marriage endowment insurance policy, if such a policy becomes due for premium payment in part or in full before the subscriber turns 55 years in age.