When think of EPF (Employees’ Provident Fund), retirement savings usually come to mind. However, EPF membership also grants a valuable life insurance cover of up to ₹7 lakh at no extra cost through the Employees’ Deposit-Linked Insurance (EDLI) scheme, securing your family’s financial future in case of unfortunate events.
What is the EDLI Scheme?
The EDLI scheme is a life insurance benefit managed by the Employees’ Provident Fund Organisation (EPFO) exclusively for EPF members. Unlike EPF and the Employees’ Pension Scheme (EPS), which require contributions from both employees and employers, EDLI premiums are solely paid by the employer.
Automatic eligibility is granted to salaried employees contributing to EPF, provided they have worked continuously for at least one year. There is no minimum service condition to qualify, ensuring broad coverage for the workforce.
How Much Life Cover Does EDLI Provide?
The sum assured is calculated as 35 times the average monthly salary of the last 12 months before death, with a maximum limit of ₹7 lakh. A bonus of ₹1.75 lakh may also be added, raising the total potential payout to ₹7 lakh. This makes it a significant financial cushion for families of EPF members.
Who is Eligible?
- An active EPF member at the time of death.
- EPF contributions must have been deposited by the employer for at least 12 months in the preceding year.
- Employees on the payroll within six months before death are also covered.
- Eligibility is automatically extended with no separate premium paid by the employee.
How to Claim the Life Insurance Benefit?
In the unfortunate event of death, the nominee or legal heir must submit the claim through the employee’s last employer. Required documents include:
- Composite Claim Form used for PF, pension, and EDLI claims.
- Death Certificate or Succession Certificate.
- Cancelled cheque for the beneficiary’s bank account.
The employer attests the claim before forwarding it to the regional EPF office for settlement. Recent procedural improvements have streamlined and fast-tracked claim processing.
Additional Considerations
- Employers contribute 0.5% of the employee’s basic salary towards the EDLI scheme.
- Short job breaks of up to 60 days are counted as continuous service for eligibility.
- The scheme covers death from any cause worldwide, providing uninterrupted life insurance protection.
Conclusion
The EDLI scheme is a powerful, no-cost life insurance benefit for millions of EPFO members, offering up to ₹7 lakh of financial security to families during difficult times. Understanding this lesser-known aspect of EPF membership empowers employees to ensure their loved ones are protected beyond retirement savings.
Stay informed, keep your nomination updated, and familiarize yourself with the claim process to make the most of this important benefit through your EPF membership.
