For subscribers to EPFO, this cover is free!
For subscribers to EPFO, this cover is free!
If an employee passes away for any cause while still working, the EDLI provides his or her nominee with an insurance benefit of up to Rs 7 lakh.
In addition to pension, employees who are EPFO members also receive other advantages. The Employee’s Deposit Linked Insurance Scheme (EDLI) is one of them. This method is unknown to many people. If an employee passes away while still working, under the EDLI, his nominee will be given an insurance benefit of up to 7 lakh rupees. The unique feature is that this insurance is absolutely free. There is no premium due from the employee.
How then does this operate?
Every month, employers who have PF deductions make a premium deposit equal to 0.5% of the employee’s basic pay + DA. The basic pay can only be paid up to a maximum of 15,000 rupees. In order to cover EDLI, the corporation deposits 75 rupees each month. Employees receive up to 7 lakh rupees in insurance coverage based on this premium.
If a subscriber passes away, the insurance will pay out to his or her nominee. This benefit is provided in the event of a natural death, an accident, or a fatal sickness. The insurance will only pay out if the employee has been employed for at least a year prior to passing away. Additionally, he must have consistently deposited PF. It doesn’t matter if he has worked for one or several businesses. In order to get the benefit if no nominee has been registered under the EDLI system, the employee’s legitimate successor must present legal documentation.
Insurance coverage amount
The insurance cover can be calculated using a formula. Up to a maximum of 15,000 rupees, the employee’s 12-month average basic wage is taken into consideration. The insurance cost is 35 times the minimum wage. This sum includes a bonus of up to 1.75 lakh rupees. Based on the employee’s average PF balance over the previous 12 months, this bonus is calculated. The maximum insurance benefit is only 7 lakh rupees, though. Under EDLI, insurance coverage must be at least 2.5 lakh rupees.
An employee might receive a basic wage of, say, 15,000 Rupees per month. Additionally, the insurance will be determined in this manner if he passes away while on duty.35 times 15 equals 5,25,000 rupees. A bonus of 1,75,000 rupees will also be included. His family will therefore be covered by insurance to the tune of seven lakh rupees.
filing a claim
The nominee or legal heir of an EPF subscriber who passes away may submit a claim to receive the insurance coverage. At least 18 years of age are required for the nomination. If the nominee is younger, his guardian may submit a claim. There will be a need for paperwork like death and succession certificates. Two forms must be completed in order to withdraw funds from the PF account. The first is the form that was delivered to the employer. Another is insurance protection form 5IF. Once this straightforward procedure is over, the victim’s family will receive the insurance coverage.
Share the UAN number with your family if you are an EPFO member and your PF is being withheld. Complete this task as quickly as possible if the candidate has not yet been registered in the PF account. When the nominee gets married, update it. Talk occasionally with your spouse about PF, EPS, and EDLI. Record this in your diary. The nominee won’t have to look around for the claim amount if he is well informed about this.
