EPFO’s EDLI scheme
EPFO: We consider PF as just a tool for old age or a means of savings, but very few people know that this account also gives you a free security cover for difficult times. EPFO not only provides pension or accumulated capital to its subscribers, but also provides free life insurance up to Rs 7 lakh. This facility is available under the EDLI (Employees’ Deposit-Linked Insurance) scheme.
You get security cover without paying any money
The most special thing about this scheme is that not a single penny goes from the employee’s pocket for this. The entire premium for insurance under the EDLI scheme is paid by your company or employer. As soon as your PF account is opened, you automatically join this insurance scheme. For this you do not have to rush to fill any separate form or apply. The main objective of this scheme is that if any untoward incident happens to an employee while on the job, his family can be saved from sudden financial crisis.
How is the amount of Rs 7 lakh decided?
Now the question is, how is the insurance amount decided? This calculation completely depends on the salary of the employee. According to the rules, the basic salary and dearness allowance (DA) of the employee for the last 12 months are taken as the basis. The amount of insurance cover is 35 times the average salary. Along with this, a bonus of Rs 1.75 lakh is also added to it.
EPFO has fixed the maximum limit of salary for this calculation at Rs 15,000. That means if Rs 15,000 is multiplied by 35 then the amount becomes Rs 5.25 lakh. By adding a bonus of Rs 1.75 lakh to this, the total amount becomes Rs 7 lakh. This is the maximum help available under this scheme.
What needs to be done to make a claim?
If a PF account holder dies during employment, his nominee or legal heir can claim this money. The process has now been made much easier than before. For this, the nominee has to fill EDLI Form 5 IF and submit it to the regional office of EPFO. Documents like death certificate, Aadhar card, bank account information and proof of date of birth have to be attached with the claim.
It is a matter of relief that EPFO has relaxed the rules, under which even if the employee has spent some time without salary (Non-Contributory Period), the claim will not be rejected. The department tries to settle the claim within 30 days. If there is a delay, EPFO has to pay 12% annual interest to the claimant.
Who gets the money?
The nominee registered in the PF account has the first right on this money. If there is no nominee, then spouse (husband or wife), sons up to 25 years of age or unmarried daughters can also claim. Therefore, it is very important that you keep the e-nomination complete in your PF account, so that in your absence, the family does not have to visit government offices and they can easily get their rights.