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Rule 21 - GPF Policy Assignment | KartavyaDesk

GPF Rules

Original Rule Text

(2) A policy to be acceptable under these rules shall be one effected by the subscriber himself on his own life, and shall (unless it is a policy effected by a male subscriber which is expressed on the face of it to be for the benefit of his wife or of his wife and children or any of them) be such as may be legally assigned by the subscriber to the President.

What This Means

Rule 21(2) of the General Provident Fund (GPF) Rules deals with the acceptability of life insurance policies as security for GPF withdrawals or advances. Essentially, it states that if you, as a government employee, want to use your life insurance policy as collateral, the policy must be in your own name and on your own life. This ensures that the policy's benefits are directly tied to your life and can be used to recover the GPF amount if needed.

However, there's an exception for male subscribers. If a male employee takes out a life insurance policy specifically stating that it's for the benefit of his wife, or his wife and children, then the requirement for assignment to the President of India is waived. This acknowledges that such policies are already designed to provide financial security to the family, and assigning them to the President would be redundant.

In all other cases, to be acceptable under the GPF rules, the policy must be legally assignable to the President of India. This means you need to have the legal right to transfer the policy's ownership to the President as security. This rule primarily affects government employees who wish to use their life insurance policies as security for GPF withdrawals or advances.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Key Points

  • •Life insurance policies used as security for GPF must be on the subscriber's own life.
  • •Policies must be legally assignable to the President of India, unless an exception applies.
  • •Male subscribers' policies explicitly for the benefit of their wife/children are exempt from assignment.
  • •The rule ensures the policy can be used to recover GPF amounts if necessary.
  • •This rule applies when using a life insurance policy as collateral for GPF withdrawals/advances.

Practical Example

Mr. Rajesh Kumar, a government employee, wants to withdraw ₹50,000 from his GPF for his daughter's education. He offers his life insurance policy as security. The policy is in his name, but it doesn't explicitly mention his wife or children as beneficiaries. Therefore, to comply with Rule 21(2), Mr. Kumar must legally assign the policy to the President of India.

Alternatively, if Mr. Kumar's policy clearly stated that it was 'for the benefit of his wife and daughter, Mrs. Seema Kumar and Ms. Priya Kumar,' then he wouldn't need to assign the policy to the President. The policy's explicit beneficiary designation would satisfy the rule's exception for male subscribers.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Frequently Asked Questions

What does 'legally assignable to the President' mean?▼
It means you have the legal right to transfer ownership of the life insurance policy to the President of India. This is usually done through a formal assignment document.
Does this rule apply if I'm not using my life insurance policy as security?▼
No, this rule only applies when you're offering your life insurance policy as security for a GPF withdrawal or advance.
What happens if my policy isn't assignable?▼
If your policy isn't legally assignable, it won't be accepted as security for your GPF withdrawal or advance. You'll need to provide an alternative form of security.
I am a female government employee. Does the exception for policies benefiting a spouse and children apply to me?▼
No, the exception in Rule 21(2) specifically applies to policies effected by *male* subscribers for the benefit of their wife or wife and children. A female subscriber's policy must always be assignable to the President.
How do I actually assign the policy to the President?▼
You'll need to follow the procedure prescribed by your department and the insurance company. This usually involves filling out an assignment form and submitting it to the insurance company for endorsement.

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 21(2) of the General Provident Fund Rules, a life insurance policy offered as security for GPF withdrawal must generally be:

Related Rules

Rule 13GPF (Central Services) Rules, 1960 - Rule 13Rule 15GPF (Central Services) Rules, 1960 - Rule 15Rule 20GPF (Central Services) Rules, 1960 - Rule 20Rule 16GPF (Central Services) Rules, 1960 - Rule 16Rule 18GPF (Central Services) Rules, 1960 - Rule 18

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