Paying your premium dues is also a matter of distress and anxiety. EPF has always emerged out as a life savior for its employees. Even now, it has come up with its terms to link EPF with LIC policy. Thus, in this article, we will discuss more the EPF withdrawal to fund a LIC policy and terms associated. So, let’s get started.
EPF Withdrawal To Fund An LIC Policy
Form-14 is an application seeking financial aid from the EPFO account to pay the LIC premiums. You can easily download the Form-14 from the EPFO website. Once your application gets approved, processing starts. Then the required amount gets deducted for the LIC premium. You don’t have to work on it anymore.
Paying LIC Policy at regular intervals can be a tedious job for people with a low financial thread. You make policies, but then your monthly salary is not enough to meet your ends. In addition to that, there are other mandatory tax impositions plus house rent, etc.
So, in such cases, if you’re a salaried person with an EPF account, your job gets done. You can quickly pay your policy from your EPF account. However, not many are aware of it. You’re not required to do it yourself. Instead, you can direct your EPFO to directly transfer the amount to your LIC policy in its regular period. You can govern your EPFO about it at the time of subscribing to the LIC Policy.
Else, at the time of initial premium payment while filling Form-14.
Eligibility Criteria To Withdraw EPF For Paying LIC Premiums
Although the way is quite simple, you need to know a few limitations and eligibility for the process to pay LIC policy premium from EPF account-
i. Your EPFO account would at least be 2 years old. In case your account is new and less than 2 years, you cannot avail of this option.
ii. You must have enough EPF corpus to meet the LIC premiums and save up for any emergency. If not, you may not get the opportunity to use your EPF amount.
iii. Your annual EPF share must not exceed the total annual premiums of your LIC policy. For example, your annual LIC policy is Rs. 1 lakh, and EPF corpus annual share is Rs. 80,000. In this situation, you will not get the opportunity to avail.
In Case Of Insufficient Balance In EPF Account
When you’ve insufficient balance in your EPF account, it stops on its own. Thus, it is important for you to opt for a better choice for LIC premium payments. Else, either your EPF amount will get over or your LIC premium will get rejected.
Thus, it is not a wise decision to pay your LIC premiums through EPF corpora. Keeping an eye on your EPF corpora and LIC premiums is quite tenacious. It is like you’re balancing yourself on two boats at a time. You’ve to keep track of your money in EPF account and your premiums too. At the other time, your insurance policy might get riskier. If it failed to pay its premiums on time, it might even get rejected.
In Addition to that, the EPF amount is a savings account for future use. Using it for premium payment can provide a bowl with significantly fewer fruits to meet your end. So, it’s required to make a wise decision and do the rest.
Application To Link Your LIC Policy With EPF Account For Financial Aid:
You need to submit this form for financing your LIC premiums from the EPF amount. You must fill this form and submit to the EPFO officer for linking with the EPF account. You need to provide your details, such as the amount to the money you want to withdraw, PF account number, etc.
Prerequisites For Form-14
There are certain requisite criteria that you must keep aside before filling the form. These are mentioned below-
a. You must be a member of EPFO.
b.Your account must be at least 2 years old.
c. You must have enough cash in your EPF account.
d. Your bank account number and IFSC number must be the same as in UAN.
e. All the details mentioned must be absolutely correct. If submitted physically, make sure you must not make any spelling errors or overwrite.
The settlement of your Form-14 gets approved within a max of 10 days.
The Form-14 Contains The Following Details-
The form-14 contains 4 pages.
1. Your name.
2. Name of your organization.
3. Mention the amount of money you want to transfer.
4. Next, provide your EPF account number.
5. Mention the periodical amount that you need for your premium payments.
Then Comes Page-2. It Contains-
1. It contains a portion that is to be filled by the commissioner.
2. Mention the total amount in your EPF account.
3. Submit your annual contribution to the EPF account. Based on this, it’s decided if the application can get approved or not.
On the same page itself, you need to provide the details of the policy like-
1. Address of the policy office.
2. Policy no. and the date of the proposal.
3. Assured sum.
4. Date of the policy purchase.
5. Suppose the proposal is accepted or not. If yes, the first premium payment amount.
6. Cost of your policy.
7. Due(s) date of premium payment.
8. Last premium payment date.
9. Provide the proof type you surrendered for your LIC policy.
10. Name of your nominee.
1. Your signature area.
2. Space to provide your account number.
3. The organization where you work.
There’s also a place for your employer to fill.
a. His signature.
c. Code of the establishment.
Page-4 Contains An Area For Office Works.
With that, there are some essential points that you cannot ignore. Mentioned below are a few such.
Important Points To Remember-
- Name must be in BLOCK LETTERS
- The amount in your EPF corpora must be enough to meet up the requirements. If it lessens up, the linking ceases automatically. By this, you’ll end up losing your LIC policy as well as your EPF corpora.
- The link will operate till you’re a member of EPFO.
What Is Life Insurance? What Is Its Need?
Life Insurance is a small contract with significant value. It pledges payment to you or your nominee, depending on the situation. You get the amount in certain cases like-
- On reaching the date of maturity.
- Certain periodic intervals, if any.
- In case of any mishap or unfortunate death.
However, as per the contract, you’ve to pay the premiums regularly. In other words, it eliminates risk and stands a pillar of help when utmost needed.
Frequently Asked Questions
1. How to link my PF to LIC?
LIC premium payments are haunting tasks for every middle or low-class subscriber. Meeting family’s demands with these rising costs and paying premium bills at a time is tedious. So, EPFO has come up with an improvised plan. It aids you to pay your LIC premiums on time, directly from your EPF. With a single calculated move, you can meet all your plans. But, for this, you must be an EPFO subscriber.
Major points are listed below:
i. Your EPF account must be at least 2 years old for you to avail of this scheme.
ii. Instruct your EPFO to link your PF to LIC premium payments.
iii. This you can do by filling the form 14.
iv. Ask your EPFO officer to pay the premiums from your EPF corpora every month.
However, one thing you must keep in mind that there’s enough amount in your EPF corpora to meet the demands, both your emergency requirements and LIC premiums. In case of a shortage of enough money in your account, linking ceases. Either you’ve to pay from your pocket or give up on your LIC policy.
2. Is it wise to link your LIC policy with PF?
Okay, this might vary from person to person, as one might find it efficient while one may not. One may have enough funds in his account, and one might not.
The major factor playing in this is the amount of money in your account. If the amount of money in your account is low, payment ceases. For that, you need to take care of your calculations, be it of your EPF or LIC premiums.
Keeping a mark on the calculations of your EPF amount, and remembering the same for LIC premiums is a tedious job. With that, if you stop paying your LIC premiums, it will indeed lapse.
It’s quite risky!
Added to that, EPF is a retirement corpus. Linking up with LIC premiums won’t fetch much except for mishandled amount, if not handled properly.
So, in my opinion, I would suggest it is not wise to link. However, if you’ve no other ways left, then you’re bound to link .
Life these days is uncertain. Thus, coping up with the uncertainty is in itself a triumph. Make your own life secure. After you, framing a broad pavement for your family, is a sense of love. LIC is one such pavement. However, linking it with EPF can pose a threat to your future savings if not appropriately handled. So, take every step with full certainty and head on towards a happy life.