Rule 18 - GPF & Insurance Policies
Original Rule Text
RULE 18- NUMBER OF POLICIES THAT CAN BE FINANCED FROM THE FUND (1) The number of policies in respect of which substitution for subscriptions due to the Fund or withdrawal of subscriptions from the Fund may be permitted under rule 17, shall not exceed four;
Provided that where immediately before the 22nd June, 1953, substitution for subscription due to the Fund or withdrawal of subscriptions from the Fund, was permitted in respect of more than four policies, such substitution or withdrawal shall continue to be permitted in respect of those policies.
(2) The premium for a policy [including any policy referred to in the proviso to sub-rule (1)] in respect of which withdrawal of subscriptions from the Fund may be permitted under rule 17 shall not be payable otherwise than annually.
Explanation - In computing maximum number of policies specified in sub-rule (1), policies which. have matured or have been converted into paid up policies shall be excluded.
What This Means
This rule explains the limits on how many life insurance policies a government employee can link to their General Provident Fund (GPF) for premium payments. Essentially, you can use your GPF to cover the premiums for a maximum of four life insurance policies. This means you can either reduce your regular GPF contributions because you're paying a policy premium, or you can withdraw money from your GPF to pay for these premiums.
There's an important exception: if you were already using your GPF to pay for more than four policies before June 22, 1953, you can continue to do so for those specific policies. Also, if you're withdrawing money from your GPF to pay premiums, those premiums must be paid once a year (annually), not more frequently. When we count the four-policy limit, any policies that have already paid out or have become 'paid-up' (meaning you don't need to pay more premiums, but the policy is still active for a reduced amount) are not included in this count.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1A maximum of four life insurance policies can be linked to your General Provident Fund (GPF) for premium payments.
- 2This linking can be done either by substituting GPF subscriptions or by withdrawing funds from your GPF.
- 3If you were already financing more than four policies through GPF before June 22, 1953, you are allowed to continue doing so for those specific policies.
- 4Premiums for policies financed by withdrawals from the GPF must be paid annually, not more frequently.
- 5Policies that have matured or have become 'paid-up' are not counted towards the four-policy limit.
Practical Example
Ms. Priya Sharma, a Senior Clerk in the Ministry of Finance, currently has three active life insurance policies for which she uses her GPF to pay the annual premiums. She is considering taking out two more policies – one for herself and one for her spouse. According to Rule 18, she can link one more policy to her GPF, bringing her total to four active policies financed by the fund. However, she cannot link the fifth policy to her GPF for premium payments, as this would exceed the maximum limit of four.
Let's say one of Ms. Sharma's existing policies matures next year. Once that policy matures, it will no longer count towards the four-policy limit. At that point, she would be able to link a new policy to her GPF for premium payments, as she would then have only three active, non-matured/non-paid-up policies linked. She must also ensure that any premiums paid through GPF withdrawals are made on an annual basis.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Cross References
Frequently Asked Questions
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This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Test Your Knowledge
Question 1 of 3
According to Rule 18 of the General Provident Fund Rules, the provision allowing substitution or withdrawal for more than four life insurance policies applies to arrangements that were in place: