Paying insurance premiums on time is crucial to keep your life cover active. However, during financial stress, arranging money for LIC premium payments can become challenging. If you are a Life Insurance Corporation of India (LIC) policyholder, there is a useful option you may not be fully aware of — you can pay your LIC premium directly from your EPF account managed by EPFO.
The Employees’ Provident Fund Organisation (EPFO) allows eligible members to withdraw a specific amount from their PF balance to pay LIC premiums. This facility helps policyholders prevent their insurance policy from lapsing due to temporary cash shortages.
As per Paragraph 68(DD) of the EPF Scheme, EPFO members are permitted to use funds from their EPF account to pay LIC premiums. This option can be used while purchasing a new LIC policy or for paying future premiums of an existing policy.
The key objective of this provision is to provide financial relief during emergencies while ensuring continued life insurance coverage.
Not every EPF member can automatically use this benefit. Certain eligibility conditions must be met:
You must be an active EPFO member
Your EPF account should have a balance equal to at least two months’ salary
The LIC policy must be in your own name
Policies taken in the name of spouse or children are not eligible
Only LIC policies qualify; private insurance policies are excluded
Meeting all these criteria is essential for successful approval.
EPFO allows withdrawal only up to the exact premium amount required for the LIC policy. No excess withdrawal is permitted.
Important points to note:
The withdrawn amount is directly deducted from your EPF balance
This may have a long-term impact on your retirement savings
The facility can generally be used once in a year
It is mainly applicable to annual premium payments
Because EPF is meant for retirement, experts recommend using this option sparingly.
Here’s how you can link your LIC policy and activate premium payment through EPF:
Submit Form-14 to initiate the process
Visit the EPFO official website
Log in using your UAN and password
Go to the KYC section
Select LIC Policy option
Enter your LIC policy number and required details
Submit details for verification
Once the policy is successfully linked, the premium amount will be automatically deducted from your EPF account on the due date.
Reduces the risk of policy lapse
Helpful during temporary financial emergencies
No need to take high-interest loans
Entire process is online and hassle-free
Ensures continued life insurance coverage
This option acts as a financial safety net when cash flow is tight.
Facility is available only for LIC policies
Generally applicable to annual premium payments
Incorrect details or incomplete KYC may lead to rejection
Aadhaar, PAN, and bank details must be updated in EPFO records
Frequent use can reduce retirement corpus
Using EPF funds to pay LIC premiums can be extremely helpful during emergencies. However, it should be treated as a backup solution, not a regular habit. Your EPF savings are meant to secure your future, so withdrawing funds frequently may affect your long-term financial stability.
