EPFO Insurance under EDLI Scheme: When we talk about Employees Provident Fund, we think it as a retirement scheme, in which both employer and employees contribute. If fully exhausted, the monthly contribution provides one a sizeable retirement corpus. But, we never consider EPF as an insurance scheme.
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We hardly think that EPFO can provide up to Rs 7 lakh insurance the family members/nominee/legal heir if the active member dies midway through their service. EPFO has such provision which provides up to Rs 7 lakh insurance to the legal heir and nominee. The scheme is known as Employees’ Deposit Linked Insurance Scheme (EDLS). In this write-up, know more about this scheme.
What is EDLI?
In 1976, the central government started providing insurance benefits to the family members of active EPF account holders.
The purpose of the EDLI scheme was to ensure financial assistance to the family members of an employee who dies during their job.
All members get the facility of EDLI scheme.
The insurance amount can be up to Rs 7 lakh and it depends on the salary drawn in the last 12 months of the employment by the employee before their death.
What is the claim amount under EDLI?
The claim amount under the EDLI scheme is 35 times the average monthly salary in the last 12 months.
But it can’t exceed Rs 7 lakh. The minimum benefit amount under the scheme is Rs 2.50 lakh.
Apart from that, a bonus amount of Rs 1.75 lakh is also available to the famile members of the deceased.
Do you have to apply for EDLI?
All organisations registered under the Employees Provident Fund and Miscellaneous Provisions Act, 1952, automatically qualifies for EDLI.
It is mandatory for them to subscribe to this scheme and enrol their employees with a basic salary of at least Rs 15,000.
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Do I have to contribute to EDLI?
No. An employee has to contribute to EPF and Employee Pension Scheme (EPS). As far as EDLI scheme is concerned, only employer contributes 0.5 per cent of the basic salary and dearness allownace of an employee (subject to a maximum of Rs. 75).
