EPFO – Let us tell you that Employees Provident Fund Organization provides life insurance facility to all its members. Under this facility, every EPFO member gets a maximum insurance cover of up to Rs 7 lakh. If you also want to take advantage of this, then do this work before that…
Employees Provident Fund Organization (EPFO) provides life insurance facility to all its members. Under this facility, every EPFO member gets a maximum insurance cover of up to Rs 7 lakh. 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 a member of EPFO, then you must know about this scheme. Let us tell you in which situations this scheme can be availed and how the claim amount is calculated.
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 an EPFO member dies, his heir or nominee can claim 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 percent of the employee’s basic salary and dearness allowance.
How is the claim amount calculated?
This question must be in your mind as to how the claim amount is calculated in this scheme which provides free insurance up to a maximum of Rs 7 lakh. Let us tell you 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 the last basic salary + DA. Apart from this, a bonus amount of up to Rs 1,75,000 is also paid to the claimant. For example, suppose 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, his nominee or legal heir can claim for insurance cover. For this, the age of the nominee should be at least 18 years. If it is less than this, the parents can make a claim on his behalf. While making a claim, documents like death certificate, succession certificate are required. 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-
- A claim can be made regarding EDLI in case of illness, accident or natural death of an employee while working.
- The EPFO member is covered by the EDLI scheme only as long as he is employed. After leaving the job, his family/heirs/nominees 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 Rs 2.5 lakh.
- If there is no nomination under the EDLI scheme, then the coverage is considered as the spouse, unmarried daughters and minor son/sons of the deceased employee are the beneficiaries.
- To withdraw money from the PF account, along with the form to be submitted to the employer, Form 5 IF of the insurance cover also has to be submitted. This is verified by the employer.
