EPFO subscribers are entitled to free benefits worth ₹ 7 Lakhs

EPFO subscribers are entitled to free benefits worth ₹ 7 lakhs.
All EPFO members are automatically enrolled for the EDLI Insurance Scheme which provides an assured life insurance cover of up to ₹ 7 lakh to legal heirs or nominees in the event of death of policy holder

All members of the Employee Provident Fund Organisation (EPFO) are also entitled to a free life insurance cover worth ₹ 7 lakh under the retirement fund body’s Employees’ Deposit Linked Insurance Scheme (EDLI).

The EDLI-EPFO comes with the benefit of an assured life insurance benefit of ₹ 7 lakh at no cost or premium paid by the members.

The nominee or legal heir of EPFO active member gets upto ₹ 7 lakh insurance cover in case of demise of the account holder during active service.

EPFO account holders are automatically enrolled for EDLI insurance under Employees’ Provident Fund (EPF) & Miscellaneous Provisions Act, 1976. There is no premium or other formalities involved to avail the facility. There is no exclusion & the insurance cover is decided by the salary drawn by the beneficiary during the last 12 months prior to demise. It is to be noted that employer pays 12% out of which 8.33% is diverted to Pension Fund. An employer also pays 0.5% of pay in EDLI Scheme.

The EPFO body time & again tweets about the facility & its features to make subscribers aware of the salient features of the scheme.

Few things to know about EPFO-EDLI Scheme : 
1. Maximum Assured Benefit : The maximum death benefit upto ₹ 7 lakh to the nominee or legal heir in case of death of the EPFO member during service. The maximum sum assured earlier was ₹ 6 lakh which was increased to ₹ 7 lakh subsequently from April 2021.

2. Minimum Assured Benefit : The minimum assured benefit for legal heir or nominees of an EPF subscriber is ₹ 2.5 lakh under the ELDI 1976. Sum assured is based on salary during the 12 months prior to the death.

3. How is sum Assured Calculated :  The claim amount under this scheme is 30 times the average monthly salary in the past 12 months subject to a maximum of ₹ 7 lakh. The average monthly salary is calculated as the Basic + Dearness Allowance of the employee. A bonus of ₹ 2.5 Lakhs is also applicable under this scheme The employer can opt-out of the scheme in case he takes a higher paying life insurance scheme for employees under Section 17 (2A). There are no exceptions to the insurance coverage provided by EDLI. It protects the insured person round the clock

4. Free for Employees : This life insurance benefit being given to the EPFO member is free of cost for the PF/EPF account holders. Their employer will pay 0.50 per cent of the monthly wages up to the ceiling of ₹ 15,000.

5. Auto-Enrolment : There is auto-enrolment provision for PF or EPF account holders. They become eligible for EDLI scheme benefit once they become an EPFO member or subscriber.

6. Direct bank Transfer : The EDLI scheme benefit will be directly credited to the bank account of the nominee or legal heir of the EPF or PF account holder. Note that an EPFO member is only covered by the EDLI scheme as long as he/she is an active member of the EPF. His/her family/heirs/nominees cannot claim it after he/she leaves service with an EPF registered company. There is no minimum service period for availing EDLI benefits. The employer has to make the contribution for EDLI & no fee can be deducted from the employee’s salary.

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