EPFO provides free insurance up to Rs 7 lakh to the employee. However, the claim amount of Rs 7 lakh is not given to everyone. Its calculation is done through a formula. Here know some rules related to EDLI and the formula for determining the claim amount.
EDLI Scheme: If you are a job holder and contribute to EPFO ​​every month, then you should know that the Employees’ Provident Fund Organization provides free insurance up to Rs 7 lakh to EPFO ​​members. This insurance scheme is known as Employees Deposit Linked Insurance (EDLI). This scheme is run to provide financial security to the employee’s family.
If the EPFO ​​member dies due to any reason, then his successor or nominee can claim this insurance amount. However, the claim amount of Rs 7 lakh is not given to everyone. Its calculation is done through a formula. Here know some rules related to EDLI and the formula for determining the claim amount.
The employee does not have to pay premium
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 percent of the employee’s basic salary and dearness allowance. Usually people are aware of PF money and pension scheme, but are not aware of the EDLI scheme.
The amount is decided by this formula
In this scheme, which provides free insurance up to a maximum of Rs 7 lakh, the calculation of the claim amount is decided under a certain formula. The insurance amount depends on the basic salary and DA of the last 12 months. The claim of insurance cover will be 35 times the last basic salary + DA. Along with this, a bonus amount of up to Rs 1,75,000 is also paid to the claimant. 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 an EPF subscriber dies prematurely, then his nominee or legal heir can claim for insurance cover. For this, the nominee should be at least 18 years of age. If it is less than this, the guardian can claim on his behalf. While making a claim, documents like death certificate, succession certificate are required. If the claim is being made by the guardian of a minor, then guardianship certificate and bank details will have to be given.
Rules related to EDLI
- EPFO member is covered by EDLI scheme only as long as he is employed. After leaving the job, his family / heir / 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 a benefit of at least 2.5 lakhs.
- EDLI can be claimed in case of illness, accident or natural death of the employee while working.
- If there is no nomination under EDLI scheme, then the spouse, unmarried daughters and minor son / sons of the deceased employee are considered beneficiaries.
- For withdrawing money from the PF account, along with the form to be submitted to the employer, Form 5 IF of insurance cover also has to be submitted. This is verified by the employer.
Also Read-
- SBI FD Vs KVP: Invest ₹5,00,000 for 10 years…how much profit will you get? See the calculation
- 7th Pay Commission: DA of central employees will increase by this much from July, know when it will be announced?
- Bank Holiday List in August: Banks will remain closed for 14 days in August, See list here
