EPFO Insurance Claim, Employees Deposit Linked Insurance Scheme: For this insurance scheme, the employee does not have to make any separate contribution, rather the entire expense is borne by the employer.
Employees Deposit Linked Insurance Scheme (EDLI): Lakhs of employees working in the organized sector of the country are associated with the Employees Provident Fund Organization (EPFO), but most people are not fully aware of all the benefits available under it. EPFO is not limited to pension and provident fund only, but under this, employees also get life insurance up to Rs 7 lakh. This insurance cover comes under the Employees Deposit-Linked Insurance (EDLI) scheme, the premium of which is paid not by the employee himself but by his employer. The objective of this scheme is to provide financial security to the employees and their families.
EDLI Scheme: What is it and how does it work?
The main objective of the EDLI (Employees’ Deposit Linked Insurance) scheme is to provide life insurance protection to the employees of the organized sector. If an employee dies during the job, his family gets financial assistance. Under this scheme, the insurance amount is given to the legal heir or nominee of the employee.
Currently, the minimum sum insured under the EDLI scheme is Rs 2.5 lakh and the maximum is Rs 7 lakh. The employee does not have to make any separate contribution for this insurance scheme, rather the entire expense is borne by the employer. This security cover does not affect any other insurance policy, rather it acts as an additional benefit.
Determination of the insurance amount
The sum insured is calculated based on the average salary of the employee for the last 12 months. Under this scheme, the employer contributes 0.5% of the employee’s basic salary (maximum Rs 75 per month). This amount is deposited directly in the EPFO and is given to the employee’s family when needed.
Who gets the benefit of the scheme?
- EPFO membership: Only employees who are members of the EPFO can avail the EDLI scheme.
- Continuous employment: If an employee has been on job for 12 continuous months, then in case of his death, his family is entitled to receive a minimum of Rs 2.5 lakh.
- Mode of Death: Claims can be made under this plan in cases of illness, accident or natural death.
- Nomination: If the employee has not nominated any nominee, the insurance amount is paid to his spouse, unmarried daughters and minor sons.
How to claim the insurance amount?
If an employee dies, his family has to fill Form 5IF to receive the insurance amount. Along with this, the following documents have to be submitted.
Death certificate
- Nomination certificate or proof of legal heir
- PF withdrawal form (if EPF amount is also to be withdrawn)
- After all the documents are completed, they are submitted to the concerned EPFO office.
- After the process is completed, the insurance amount is transferred directly to the beneficiary’s account.
Recent changes to this plan
Earlier the maximum sum insured under the EDLI scheme was Rs 6 lakh, which was increased to Rs 7 lakh in April 2024. Apart from this, the minimum sum insured has been fixed at Rs 2.5 lakh. This change has been made by the central government keeping in mind the interest of the employees.
The EDLI scheme under EPFO is an important safety net for employees and their families. This scheme provides life insurance cover of up to Rs 7 lakh without any additional contribution. If you are an EPFO member, keep this scheme informed and avail it when needed.
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