The Indian government has clarified it will not redirect unclaimed funds from LIC and EPFO for other purposes. As of March 2026, over ₹16,600 crore in these accounts will remain dedicated to policyholders and subscribers. Both institutions are intensifying efforts to simplify the claims process for account holders.
Detailed Coverage
The Indian government has officially clarified that it has no plans to repurpose unclaimed funds lying with the Life Insurance Corporation of India (LIC) or the Employees' Provident Fund Organisation (EPFO). Addressing speculation in the Lok Sabha, Minister of State for Finance Pankaj Chaudhary confirmed that these funds will continue to be managed strictly under existing regulatory frameworks.
Status of LIC and EPFO Unclaimed Accounts
As of March 31, 2026, the total amount of unclaimed funds across these two institutions stood at over ₹16,600 crore. LIC holds approximately ₹7,318.50 crore in unclaimed amounts, which include both policyholder benefits and accrued income. Under current IRDAI guidelines, insurance funds that remain unclaimed for more than 10 years are transferred to the Senior Citizen Welfare Fund. The government’s statement ensures that this transfer mechanism remains unchanged and that such funds are not diverted for other government spending.
Meanwhile, the Finance Ministry clarified that EPFO accounts are distinct from government funds. As of March 31, 2026, there was ₹9,330.56 crore in inoperative EPF accounts. These accounts, which have not received contributions for an extended period, remain the property of the original subscribers or their designated nominees. By officially distinguishing these as private savings rather than government-owned money, the ministry has addressed concerns regarding the potential use of these balances for wider fiscal goals.
Efforts to Return Funds to Subscribers
To ensure these savings reach their rightful owners, both LIC and EPFO have ramped up their outreach programs. LIC is leveraging its vast network, including direct communication via letters, SMS, and collaboration with its network of agents and credit bureaus to identify and contact policyholders. The insurer is also part of the 'Your Money-Your Right' awareness campaign.
For its part, the EPFO is focusing on digital and automated solutions to simplify the retrieval process. A pilot project is currently underway to facilitate the automatic settlement of inoperative accounts that have balances up to ₹1,000, provided the accounts are Aadhaar-verified. In such cases, the funds are credited directly to the subscriber's Aadhaar-linked bank account, removing the need for manual paperwork. Additionally, the EPFO continues to utilize its 'Nidhi Aapke Nikat' (NAN) 2.0 program and social media platforms to reconnect with members. Investors and account holders should monitor future updates regarding the potential expansion of automated claim settlements to accounts with higher balances, as this remains a key area of focus for improving fund accessibility.