The central government has said it has no proposal to use unclaimed funds lying with LIC or money held in inoperative EPFO accounts for any purpose other than the existing mechanism. There are fears and speculation about the government's use of dormant funds.
The clarification will provide reassurance to millions of LIC policyholders and EPFO subscribers that their unclaimed funds will continue to be managed under the existing legal and regulatory framework.
There is no plan to divert or repurpose the money lying in unclaimed LIC policies or inactive EPF accounts. These funds will remain available for legitimate claims by policyholders, nominees, or EPF members who establish their eligibility as per the prescribed procedures.
Unclaimed LIC funds usually arise when policyholders or their nominees do not claim insurance benefits after a policy matures or after the death of the insured. Similarly, inoperative EPFO accounts are those in which no contributions have been received for a long period, but the account holders have retained their accumulated savings.
The government emphasized that LIC and EPFO already have mechanisms to protect these funds and make claims when eligible beneficiaries come forward. That clarification should ease subscribers’ fears that dormant balances could be used for unrelated government expenditure.
The government has always encouraged citizens to regularly review their insurance and provident fund accounts so records are kept up to date. Each policyholder should keep nominee information up to date and inform family members about their insurance policies to prevent benefits from going unclaimed.
Similarly, EPF members are advised to link their Universal Account Number (UAN) with Aadhaar, update KYC information, and consolidate multiple EPF accounts when job changes occur. We believe this helps to reduce the number of inactive accounts and reduce the pressure on members to access retirement savings.
Financial experts suggest that people regularly verify their LIC policies and EPF accounts and bank accounts through official online portals. Constant updates on contact details, bank account details, and nominee records can reduce the odds of funds remaining unclaimed.
This is the latest clarification from the government that it is committed to protecting the interests of policyholders and salaried employees. To make sure that there isn’t any proposal to use unclaimed LIC or EPFO funds for a purpose other than the existing framework, the Centre has supported millions of people to know that their savings and insurance benefits are safe.
As financial planning and digital services are becoming more popular, authorities expect more policyholders and EPF subscribers to claim dormant funds so that such long-term savings can be delivered to their rightful owners or nominees without unnecessary delays.
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