Many private and government employed people deposit a small part of their salary in the provident fund (PF). You get this money deposited in PF with full interest at the time of retirement from any urgent, urgent need or service. But, many of you may not know that, PF account holders depositing money in PF also get insurance cover. This insurance is similar to a ‘Life Risk Policy’. Unfortunately, if the account holder dies, then the insurance amount is paid to the next of kin or nominee. In fact, this insurance is received by the PF account holder under the ‘Employees Deposit Insurance Scheme’. The account holder is insured under this scheme. Under this, in the event of death of the employee during the service period, the sum insured as a lump sum payment is paid to the next of kin, Which can help the family financially. Apart from the money deposited in PF and how much money is received in different situations and what are the rules associated with it. Let us make you aware of this…
Family can get maximum payment of up to 7 lakh rupees
Under this insurance scheme, an employee can get a maximum insurance of up to Rs 7 lakh. Earlier this amount was fixed at Rs 6 lakh, which has been increased to Rs 7 lakh from last year. If an active employee of Employees Provident Fund Organization (EPFO) dies during the service period, his nominee is paid a lump sum up to Rs 7 lakh.
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This is how the sum insured is calculated
This amount is not 7 lakh rupees for everyone, it is determined by some different calculation. Actually, the amount received from this insurance is 30 times the monthly salary received in the last 12 months, but it cannot be more than seven lakhs. In such a situation, your family can get a maximum benefit of up to 7 lakhs under this scheme. This amount is received by the next of kin of the active employee. The family receives this money after the accidental or general death of the employee and some documents have to be submitted for it, then the claim is received. By the way, after the death of an employee, only the nominee or legal heir gets this money. For this, proper paperwork has to be completed.
Account Holder and Employer Contribution to PF
Explain that 12% of the basic salary of the account holder is deposited in the EPF and the same amount is deposited in the EPF by the ’employer’ (the institution where the employee is serving). But, apart from this, some contribution is made by the employer, which is 0.5% of the basic salary and under this, the Sum Assured up to Rs 7 lakh is provided to the nominee or family members after the death of the employee.
