Failure to pay the premium of a life insurance policy on time puts you at risk of losing your insurance cover, which can lead to problems in getting claims.
However, if you have a Life Insurance Corporation of India (LIC) policy, then you can also pay its premium from the Employees’ Provident Fund (EPF) account. EPFO has given this facility with certain conditions.
Tax consultant KC Goduka says that both life insurance policy and EPF are very important. Investments in both of these are eligible for tax exemption under section 80C. In such a situation, the option of paying LIC’s premium from EPF should be chosen only in very difficult times.
This way the facility is available
The very first condition is that you should have at least an amount equal to two years’ premium of LIC in your EPF account. After this you have to link the EPF and LIC policy number. For this, EPFO has to fill Form 14. This is a kind of permission letter in which you consent to pay LIC premium to EPFO on your behalf. After this the LIC premium is deducted from your EPF account at the specified time.
Take care of these things
It should be noted that this facility of EPFO is available only on payment of premium of LIC. It cannot be used for payment of premium of any other insurance company. Also, this facility is available only on policies with annual premium and not on quarterly or half yearly premiums.
