Employees Provident Fund Organization or EPFO Members, who have Life Insurance Corporation of India or LIC policy in their name, are entitled to use their EPF money to pay their life insurance policy premiums. According to tax and investment experts, an EPFO member can use his money in the EPF account for LIC premium payment, provided he has an EPF balance of at least two years of LIC policy premium. He said that those EPFO customers, who are under financial stress due to job loss or any other reason, can avail this EPFO facility to continue their LIC policy with policy renewal payment from EPF account.
How an EPFO member can use his EPF money for LIC premium payment; Pankaj Mathpal, Founder and Managing Director, Optima Money Managers said, “An EPFO member can use his EPF money for LIC premium payment. To pay LIC premium from EPF account, he needs to submit Form 14 to EPFO However, while submitting the same Form 14 to the EPFO office, the EPF account holder should ensure that the EPF balance should be at least two years of the LIC premium amount while submitting the Form 14.
Pankaj Mathpal of Optima Money Managers said that EPFO customers can avail this facility at the time of purchasing LIC policy or at a later stage of LIC premium payment. So, if an EPF account holder is under financial stress due to COVID-19 pandemic or any other reason, he can still renew his LIC policy by paying LIC premium from his EPF account. He needs to submit Form 14 to his nearest EPFO office.
LIC Policy Renewal Rules
When an EPFO member must use his EPF money for LIC premium payment, SEBI registered tax and investment expert Jitendra Solanki said, “LIC allows its policyholder to renew his policy even on late payment of premium As per LIC premium renewal rules, no late fee is levied on policy renewal after 6 months from the policy renewal date. On renewal of LIC policy after 6 months to 3 years from the policy renewal date, some late fee in addition to the policy premium However, if a person fails to renew his policy after 3 years from the policy renewal date, the LIC policy becomes inoperative. In my opinion, one has to use his EPF money for LIC premium payment. Only as a last resort. In case its LIC policy is about to become inoperative, I would advise an EPFO member to use his EPF money for LIC premium payment.
Jitendra Solanki further said that such EPFO facility is available only on LIC premium payment. One cannot use EPF account other than LIC premium payment.
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