The Employees' Provident Fund Organisation (EPFO) now allows its subscribers to pay their Life Insurance Corporation (LIC) premiums directly from their Provident Fund (PF) accounts. This facility provides a convenient option for individuals facing temporary financial constraints to ensure the continuity of their LIC policies.

To avail this facility, EPFO members need to submit Form 14 to the EPFO. This form facilitates the deduction of premium payments from the subscriber's EPF account and remits it to LIC. The form can be downloaded from either the EPFO website or the National Portal of India.

Several conditions must be met to be eligible for this facility:

• Membership Period: A PF subscriber must be a member of the fund for at least two years.
• Sufficient Funds: The subscriber's EPF balance should be equal to at least two years' worth of LIC premium amounts. The subscriber must declare their annual contribution to the PF fund. The annual EPF contribution must exceed the annual premium payment of the LIC policy.
• Policy Details: All details related to the policy premium, yearly premium amount, policy proposal number, and date must be furnished.
• Declaration: A disclaimer stating that the subscriber has not withdrawn any amount for financing any insurance policy out of their provident fund account must be provided. The person must additionally state that the policy is free of any encumbrances and that the contents of the policy proposal presented are accurate.

Once the EPFO processes the application, the authorized amount will be deducted from the EPF account and transferred directly to LIC on or before the premium due date. EPFO and LIC will link the LIC policy and the EPF account.

While this facility offers a convenient solution during financial difficulties, experts advise caution. The EPF is designed as a retirement benefit, and using it for premium payments may deplete the retirement corpus. It is recommended to discontinue the LIC insurance premium payment facility from the EPF account once the financial situation improves. Also, keeping track of both the LIC premium and the EPF account simultaneously can be challenging, especially with a small EPF corpus.

This rule can be a boon for those under financial stress. The EPFO’s move to allow LIC premium payments from PF accounts offers a safety net for policyholders facing temporary monetary issues. By understanding the eligibility criteria and potential drawbacks, individuals can make informed decisions about utilizing this facility.