Rule 25 - Policy Maturity
Original Rule Text
RULE 25- PROCEDURE ON MATURITY OF POLICIES
(l) If a policy, assigned to the President under rule 22 or under the corresponding rule heretofore in force, matures before the subscriber quits the service, or if a policy on the joint lives of a subscriber and the subscriber’s wife or husband assigned under the said rule, or under the corresponding rule heretofore in force, falls due for payment by reasons of the death of the subscriber's wife or husband, the Accounts Officer shall, save as provided by rule 28, realise the amount assured together with any accrued bonuses and shal1 place the amount so realized to the credit of the subscriber in the Fund :
Provided that if the amount assured together with the amount of any accrued bonus is more than the whole of the amount withheld or withdrawn, it shall be the duty of the subscriber to inform the Accounts Officer in writing within a month from the date of maturity of the policy, whether the difference, or a part of the difference, as specified by the subscriber, be paid to him; and it shall be the duty of the Accounts Officer to Act in accordance with the option of the subscriber.
Note: If no option is exercised by the subscriber in writing to the Accounts Officer within the period prescribed, he shall be deemed to have opted to deposit the difference in his account in the Fund. Such deposit will be merged in the amount standing to the subscriber's credit in the Fund.
(2) Save as provided by rule 28, if a policy, delivered to the Accounts Officer under clause
(b) of sub-rule (1) of rule 22, matures before the subscriber quits the service, the Account's Officer shall make over the policy to the subscriber:
Provided that if the interest in the policy of the wife of the subscriber, or of his wife and children, or any of them, as expressed on the face of the policy, expires when the policy matures, the subscriber, if the policy moneys are paid to him by the Insurance Company shall immediately on receipt thereof pay or repay to the Fund either-
(i) the whole of any amount withheld or withdrawn from the Fund in respect of the policy, or
(ii) an amount equal to the amount assured together with any accrued bonuses, whichever is less, and, in default, the provisions of Rule 29 shall apply as they apply in relation to cases where money withheld or withdrawn from the Fund under clause
(a) or, clause
(b) of rule 17 has been utilised for a purpose other than that for which sanction was given to the withholding or withdrawal.
What This Means
This rule explains what happens when a life insurance policy, which is linked to your General Provident Fund (GPF) account, matures before you retire from government service. There are two main situations depending on how your policy was linked to your GPF.
If your policy was formally 'assigned' to the President (meaning the government had a claim on it), the Accounts Officer will collect the money from the insurance company, including any bonuses. This entire amount will then be deposited into your GPF account. However, if the amount received from the policy is more than what was originally taken or withheld from your GPF for that policy, you have one month from the policy's maturity date to tell the Accounts Officer in writing if you want the extra money paid directly to you, or if you want it all deposited into your GPF. If you don't provide an option within that month, the extra money will automatically be deposited into your GPF account.
If your policy was simply 'delivered' to the Accounts Officer (meaning it wasn't formally assigned), the Accounts Officer will return the policy to you when it matures. In this case, if the policy's benefits for your spouse or children end when the policy matures, you must immediately repay to your GPF account the lesser of two amounts: either the total amount you originally took or withheld from your GPF for that policy, or the total amount received from the insurance policy (assured amount plus bonuses). If you fail to repay this amount, it will be treated as if you misused GPF funds, and penalties will apply.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1This rule applies when a GPF-linked life insurance policy matures while the government employee is still in service.
- 2For policies formally assigned to the President, the Accounts Officer collects the maturity amount and credits it to the subscriber's GPF account.
- 3If an assigned policy yields more money than was withheld from GPF, the subscriber has one month to choose whether to receive the surplus or deposit it into their GPF.
- 4If no choice is made for an assigned policy's surplus within one month, the entire surplus is automatically deposited into the subscriber's GPF account.
- 5For policies merely delivered to the Accounts Officer (not assigned), the policy is returned to the subscriber upon maturity.
- 6If an unassigned policy's benefits to the spouse or children expire upon maturity, the subscriber must immediately repay a specific amount to their GPF.
- 7Failure to repay the required amount for an unassigned policy will result in penalties as if GPF funds were misused.
Practical Example
Mr. Anil Kumar, a Section Officer, had taken a life insurance policy years ago and assigned it to the President, using some funds from his GPF to pay premiums. The policy was for Rs. 5,00,000 and matured recently, while Mr. Kumar is still 10 years away from retirement. The Accounts Officer, Ms. Priya Sharma, processed the maturity claim and received Rs. 5,80,000 (including bonuses) from the insurance company. The total amount withheld from Mr. Kumar's GPF for this policy over the years was Rs. 4,50,000.
Ms. Sharma credits the full Rs. 5,80,000 to Mr. Kumar's GPF account. She then informs Mr. Kumar that there is a surplus of Rs. 1,30,000 (Rs. 5,80,000 - Rs. 4,50,000). Mr. Kumar now has one month to decide if he wants this Rs. 1,30,000 paid to him directly or if he wants it to remain merged with his GPF balance. If he doesn't communicate his choice to Ms. Sharma within the month, the Rs. 1,30,000 will automatically stay in his GPF account.
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 25 of the General Provident Fund Rules, what happens when a life insurance policy assigned to the President of India matures while the subscriber is still in service?