EPFO Insurance Scheme: Up to 7 Lakhs Coverage for Account Holders, Here’s How to Claim

The Employees’ Provident Fund Organization (EPFO) offers a valuable life insurance facility known as the Employees Deposit Linked Insurance (EDLI) scheme to its members.

Under this scheme, every EPFO member receives insurance coverage of up to 7 lakhs. This article provides insights into how the claim amount is calculated and the process to avail of this insurance benefit.

Financial Security for Employees’ Families:

The primary objective of the EDLI scheme is to provide financial security to the families of EPFO members in case of an unfortunate event leading to the employee’s demise.

Notably, this insurance cover comes at no additional cost to the employee as the contribution is made by the employer, amounting to 0.50% of the employee’s basic salary and dearness allowance.

Calculation of Claim Amount:

The claim amount under the EDLI scheme is calculated based on the employee’s last 12 months’ basic salary and dearness allowance.

The insurance coverage is 35 times the last drawn Basic Salary + DA, along with an additional bonus amount of up to 1,75,000.

For instance, if an employee’s last 12 months’ basic salary + DA amounts to Rs. 15,000, the insurance claim will be (35 x 15,000) + 1,75,000 = Rs. 7,00,000.

Claim Procedure:

In the unfortunate event of an untimely death of an EPF subscriber, their nominee or legal heir can make a claim for the insurance coverage.

The nominee should be at least 18 years old, and in the case of a minor nominee, the guardian can claim on their behalf.

Documents such as the death certificate, succession certificate, and guardianship certificate (if applicable) are required to initiate the claim process.

Important Rules related to EDLI:

1. The EDLI can be claimed in the event of illness, accident, or natural death of the employee while employed.
2. The EDLI coverage is valid only during the employee’s tenure of employment. It cannot be claimed after leaving the job.
3. If the EPFO member has been continuously employed for 12 months, the nominee is eligible for a minimum benefit of 2.5 lakhs in case of the employee’s death.
4. In the absence of a nomination, the spouse, unmarried daughters, and minor son/sons are considered beneficiaries under the EDLI scheme.

Claim Submission Process:

To withdraw money from the PF account under the EDLI scheme, the nominee needs to submit Form 5IF for insurance cover along with the required documents to the employer for verification.