Are you worried about cash as your insurance premium payment date is approaching? Don’t worry as Employees’ Provident Fund Organisation (EPFO) can do this for you. As per the Employees’ Provident Fund Scheme, 1952, account holders can pay premium due on a life insurance policy – taken by the member on his own life – financed from his EPFO account.
As per the scheme, a member can apply for it before the Employees’ Provident Fund commissioner in such form and in such manner as may be prescribed by the Commissioner. On receipt of such application, the Commissioner or an officer authorised by him may make payment on behalf of the member to the Life Insurance Corporation of India towards premium due on his policy.
Provided that no such payment shall be made unless the premium is payable yearly.
What conditions apply?
The facility is extended on the fulfillment of certain terms and conditions:
1) No payment shall be made unless the member’s own contribution in his Provident Fund Account with interest thereon is sufficient to pay the premium; and where the payment is to be made on the first premium, sufficient to pay the premium for two years.
2) The discretion, however lies with the commissioner or his authorised officer. “No payment shall be made towards a policy unless it is legally assignable by the member to the Central Board,” the EPFF Scheme 1952 says.
3) The Commissioner shall before making payment in respect of existing policies, satisfy himself by reference to the Life Insurance Corporation that no prior assignment of the policy exists and the policy is free from all encumbrances.
4) No education endowment policy or marriage endowment policy shall be financed from the Fund, if such policy is due for payment in whole or in part before the member attains the age of 55 years.