Employees’ Provident Fund Organization (EPFO) provides life insurance facility to all its members. Under this facility, every EPFO member gets insurance cover up to a maximum of 7 lakhs. This insurance scheme of EPFO is known as Employees Deposit Linked Insurance (EDLI). This scheme was started in 1976. If you are also employed and are a member of EPFO, then you must know about this scheme. Let us tell you in which situation this scheme can be taken advantage of and how the claim amount is calculated in it.
In case of death, the family gets financial help
This scheme is run by EPFO to provide financial security to the employee’s family. If under any circumstances the EPFO member dies, then his heir or nominee can claim for this insurance amount. The special thing is that this insurance cover is absolutely free for any employee working in a private company. The contribution for this scheme is made by the company, which is 0.50 per cent of the employee’s basic salary and dearness allowance.
How is the claim amount calculated?
How the calculation of claim amount is decided in this scheme which gives free insurance up to a maximum of Rs 7 lakh, this question will be in your mind. Explain that the insurance amount depends on the basic salary and DA of the last 12 months. The claim for insurance cover will be 35 times of the last drawn Basic Salary+DA. Along with this, the claimant is also paid a bonus amount of up to 1,75,000. For example, if the basic salary + DA of an employee for the last 12 months is Rs 15,000, then the insurance claim amount will be (35 x 15,000) + 1,75,000 = Rs 7,00,000.
How to claim
If the EPF subscriber dies untimely, then his nominee or legal heir can claim for the insurance cover. For this, the age of the nominee should be at least 18 years. If less than this, the guardian can claim on his behalf. Documents like death certificate, succession certificate are required while making the claim. If the claim is being made on behalf of the minor’s guardian, then guardianship certificate and bank details will have to be given.
Rules related to EDLI
- EDLI can be claimed in case of illness, accident or natural death of the employee while doing the job.
- EPFO member is covered by EDLI scheme only till the time he is employed. After leaving the job, his family / heirs / nominee cannot claim it.
- If the EPFO member has been working continuously for 12 months, then after the death of the employee, the nominee will get the benefit of at least 2.5 lakhs.
- If there is no nomination under the EDLI scheme, then the spouse of the coverage deceased employee, unmarried girls and minor son/sons are considered as beneficiaries.
- To withdraw money from PF account, Form 5IF of insurance cover has to be submitted along with the form submitted to the employer. This is verified by the employer.
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