look news india
Members of the Employees Provident Fund Organization (EPFO) are not only entitled to Provident Fund (PF) and pension benefits, but they can also avail a free insurance cover. This insurance facility is provided under Staff Deposit Insurance (EDLI) Scheme, 1976. This is a scheme under which financial assistance is provided to his family on the unfortunate demise of the employee, and the biggest profit in it is an insurance cover of up to Rs 7 lakh.
What is EDLI scheme and how does it work?
The EDLI scheme is an insurance scheme provided by EPFO, which is designed to provide financial security to family members of the employees especially in the event of their untimely demise. This facility is available to all PF account holders and for this the employee does not have to pay any additional premium. The premium of this scheme is paid by the EPLYER under the Employees Provident Fund and Miscellaneous Provisions Act, 1952. The employer contributes to the 0.5% EDLI scheme of its monthly salary and dearness allowance (DA), which has a maximum limit of Rs 15,000.
Benefits and Claim Process of EDLI scheme:
-
insurance cover: Under this scheme, a person enrolled (Nominee) can get an insurance cover of up to a maximum of Rs 7 lakh. This limit was earlier Rs 6 lakh, which has been increased to Rs 7 lakh later.
-
Eligibility: The EDLI scheme benefits only the families of EPFO members who have contributed to continuous employment in the 12 months before death.
-
Claim on death: If the employee dies during the job, his nominated person or legal heir can claim for insurance amount.
-
Base of coverage: The insurance amount is based on the an average salary and service period of the employee’s last 12 months. It is a combination of average monthly salary (which cannot exceed Rs 15,000) and a combination of some other benefits (eg bonus, encouragement). For example, if the average salary is Rs 15,000, the original amount will be Rs 15,000 x 35 = 5,25,000 rupees. In addition, 50% of the average PF balance available in 12 months before the death of the deceased employee (up to maximum Rs 1.75 lakh) will also be payable. Thus the maximum claim can be 5,25,000 + 1,75,000 = 7,00,000 rupees.
-
How to claim: The claim is deposited using Form Form No. 5 IF, which has to be submitted to the Regional Provident Fund Office with the necessary documents (eg death certificate, succession certificate).
The scheme is especially an important safety shield for lower and middle -income families, which helps to protect them from sudden financial difficulties after the death of a family member.