LIC Holds Rs 7,318 Crore in Unclaimed Funds; Government Says EPF Deposits Remain Safe

New Delhi, July 2026: The Central government on Monday informed Parliament that the Life Insurance Corporation of India (LIC) was holding Rs 7,318.5 crore in unclaimed funds as of March 31, 2026, while clarifying that there is no proposal to use inactive Employees’ Provident Fund (EPF) balances for any purpose other than payments to eligible subscribers and beneficiaries.

In a written reply in Parliament, the Finance Ministry said the total unclaimed amount with LIC comprises Rs 5,564.5 crore belonging to policyholders and Rs 1,753.95 crore earned as accrued income on those funds. The ministry explained that these amounts continue to remain payable to the rightful claimants or their legal beneficiaries after due verification.

The disclosure comes amid growing focus on unclaimed financial assets held by insurance companies and financial institutions, prompting renewed efforts to simplify the claims process and improve public awareness.

The government also clarified the position regarding the Employees’ Provident Fund Organisation (EPFO), stating that the organisation does not classify any accounts as “unclaimed.” However, it acknowledged that Rs 9,330.5 crore is currently lying in inoperative EPF accounts, where contributions have stopped and the accounts have remained inactive for an extended period.

Officials stressed that these funds continue to belong to the account holders and can be claimed at any time by eligible subscribers or their nominees after completing the prescribed verification process.

To make settlements quicker and more convenient, the EPFO has introduced a pilot project that enables the automatic credit of balances of up to Rs 1,000 from eligible inoperative accounts linked to Aadhaar-verified beneficiaries. The initiative is expected to reduce the number of dormant accounts while ensuring that small balances are transferred directly to their rightful owners without unnecessary delays.

The Finance Ministry emphasised that there is no proposal under consideration to divert or utilise money lying in inactive EPF accounts for any other purpose. It reiterated that the funds are meant exclusively for eligible subscribers or their beneficiaries and remain protected under the existing legal framework.

The clarification was issued in response to concerns over the treatment of dormant retirement savings and insurance proceeds. The government maintained that unclaimed insurance and provident fund amounts remain fully payable to their rightful owners, with authorities working to strengthen digital verification systems and simplify claim settlement procedures.

According to the ministry, efforts are underway to improve identification, verification and payment mechanisms through technology-driven solutions, including Aadhaar-based authentication, enabling faster processing of claims and reducing delays.

The government also highlighted the scale of India’s social security network. The Employees’ Provident Fund Organisation currently serves more than 80 million active members and around 8 million pensioners, making it one of the world’s largest social security institutions.

Similarly, the Employees’ State Insurance Corporation (ESIC) provides healthcare and social security benefits to more than 150 million insured persons and their dependants across the country.

The Finance Ministry said the government has been implementing continuous reforms in both EPFO and ESIC to expand coverage, simplify compliance procedures, improve digital service delivery and ensure greater transparency. These initiatives are aimed at strengthening social security while making it easier for beneficiaries to access their rightful financial entitlements.