EPFO Update: 6 Lesser Known Facts of EDLI Scheme

The Employees' Deposit Linked Insurance Scheme (EDLI) is a type of insurance given to private sector employees by the Employees' Provident Fund Organization (EPFO). All organisations regulated by the Employees' Provident Fund (EPF) and Miscellaneous Provisions Act, 1952, are initially listed in EDLI. This policy operates in conjunction with EPF and EPS, and the enrolled nominee receives a lump-sum payout if the individual insured dies within the employment period. The insurance coverage under the scheme is based on the income earned in the last 12 months of employment prior to the death of the employer or member.

A glance at EDLI Scheme

It's worth noting that an EPFO member is only insured by the EDLI policy if he or she is a member of the Employees' Provident Fund (EPF). After he or she quits employment with an EPF-registered company, his or her family, heirs, or nominees are not eligible to claim the benefits of EDLI. This plan allows you to claim 30 times your average monthly pay for the previous 12 months, up to a maximum of Rs 7 lakh. The employee's Basic + Dearness Allowance is used to compute the average monthly wage and the scheme also comes with a bonus of Rs 2.5 lakhs. EDLI covers all private-sector employees with a monthly basic salary of less than Rs. 15,000/-. The maximum compensation is Rs 7 lakhs if the basic salary is more than Rs 15,000 per month. According to the EDLI, an employer's contribution shall be 0.5 percent of the basic salary or a maximum of Rs. 75 per month. If no other health insurance scheme exists, the maximum monthly contribution is Rs. 15,000/-.

How to raise a claim under EDLI scheme?

The benefits are available to the nominee designated by the insured individual. If no nominee has been specified, family members or legal heirs may file a claim. The most essential factor to consider while filing a claim is that the deceased individual must have been a contributing member of the EPF scheme at the time of death.

Form 5 IF must be filed by the nominee or claimant and officially signed by the employer in order to receive the insurance benefits of the scheme. If there is no employer, the form must be attested by a Gazetted Officer or Magistrate, the Chairman / Secretary / Member of the Municipal or District Local Board, or the Postmaster or Sub Postmaster, the MP or MLA, or a member of the CBT or regional committee of the EPF, or the bank manager of the bank where the account was opened and managed.

Under EPS, a family comprises a spouse, male children of up to 25 years old, and unmarried daughters of an active EPF member. The insurance benefits can be claimed by the deceased member's legal heir if there are no surviving family members of that EPF member.

In order to file a claim, the claimant must submit certain documents, including the insured person's or member's death certificate, succession certificate if the claim is filed by the legal heir, guardianship certificate if the claim is made on behalf of a minor family member/nominee/legal heir by someone other than the guardian, and a copy of a cancelled cheque of the bank account where payment is made.

If the member was last employed in an organization exempted under the EPF Scheme 1952, the employer or member of that establishment must specify his or her PF records for the previous 12 months, with an attested copy of the nomination form duly filed by him or her.

6 Lesser Known Features of EDLI Scheme

The following are the key features of EPFO's Employees' Deposit Linked Insurance (EDLI) Scheme, 1976, as stated in a tweet by EPFO.

1. Maximum assured benefit up to Rs 7 lakh paid to nominee or legal heir of EPF member if death occurs while in service.
2. Minimum assurance benefit of Rs 2.5 lakh, if the deceased member was in continuous employment for 12 months prior to his or her death.
3. Minimal contribution by an employer shall be 0.5% of employees' monthly wages, up to a wage ceiling of Rs 15,000.
4. No contribution paid by the employee.
5. Auto enrollment of PF members in EDLI scheme.
6. Benefit shall be directly credited to bank account of nominee or legal heir.