Mumbai: Many salaried employees may not know that their Employees' Provident Fund (EPF) account also provides a free life insurance cover of up to Rs 7 lakh.
This benefit is available under the Employees Deposit Linked Insurance (EDLI) Scheme, which is managed by the Employees' Provident Fund Organisation (EPFO).
Under this scheme, employees do not need to buy a separate insurance policy or pay any additional premium. The insurance cover remains active as long as the employee is covered under EPF and remains in service.
What Is the EDLI Scheme?
The EDLI Scheme is a government-backed life insurance programme designed to provide financial support to an employee's family in case of the employee's death while in service.
If an EPF member dies during employment, the nominee or legal heir receives a lump-sum insurance payout. This benefit is automatically linked to the employee's EPF membership.
There are no medical tests, extra paperwork or separate enrolment requirements for employees.
Who Can Claim the Benefit?
To receive EDLI benefits, the employee must have been actively employed and covered under EPF at the time of death.
The employer should have been making EPF contributions against a valid Universal Account Number (UAN).
Experts also advise employees to regularly update nomination details with EPFO. If no nominee has been registered, legal heirs may need to submit additional documents to establish their claim.
How Much Money Can the Family Receive?
The maximum EDLI payout is Rs 7 lakh.
The amount is calculated using two components. The first is 35 times the employee's average monthly wage, subject to the prescribed salary ceiling. The second is a bonus linked to the average PF balance, subject to a limit.
The scheme also offers a minimum benefit of Rs 2.5 lakh. In certain low-balance cases, eligible families can still receive a minimum payout of Rs 50,000.
How to Claim EDLI Benefits?
Nominees or legal heirs must submit Form 5 IF, the death certificate, KYC documents, bank account details and other required documents to EPFO through the employer or directly.
Keeping nomination details updated and informing family members about the employee's UAN can help make the claim process faster and smoother during difficult times.
