LIC Premium Payment with EPF: LIC premium payment on time is one of the daunting tasks faced by the middle class, or low-income groups every year. The biggest problem faced by them very often is the lack of cash at the required time as the middle class keep juggling between different pressing financial needs throughout the year. However, with one calculated move, one can make LIC payment automatically, even when s/he has run out of money. However, for this, you need to be an EPFO subscriber.
The LIC premium payment can be done using the EPF corpus. This feature has been available for a long time.
Here are the important points you need to know to pay LIC Premium sing EPF corpus:
1. A subscriber needs to first instruct the EPFO for paying LIC with EPFO corpus. The best time to do this is at the time of buying LIC policy. This can be done via a Form 14, which available at the EPFO website. Form 14 needs to be submitted to the employer.
2. If a person has already taken a LIC policy, s/he can still instruct the EPFO to pay premiums with his corpus.
3. EPFO stops paying the premium when there is not enough funds in the corpus. Hence, the subscriber has to take forward the task of paying premium upon himself/herself.
4. LIC premium payment facility is available only till there are enough funds in the EPF corpus.
5. One needs to be an EPF account holder for at least two years to enjoy this facility.
It is now easy these days to track the balance in the EPF account. In order to avoid paying penalty to the LIC for late premium payment, a subscriber, however, needs to keep a track of premium payment by EPFO. As sometimes, procedural delays may harm the policyholder.
Should you pay LIC using EPF corpus?
Subscriber should be aware that EPF the corpus is meant for retirement purpose. So one needs to think wisely before touching this corpus.
In case there is a financial crunch, then paying LIC premium with EPF corpus could be a good option in the short run. One can stop this facility when the s/he gets out of the crisis.