EPFO Free Insurance – EPF account holder is insured under the Employees Deposit Linked Insurance Scheme (EDLI) 1976. No separate premium has to be paid for this.
If you are employed and your PF is deducted, then you get insurance benefits up to Rs 7 lakh without paying a single penny premium. Employees Provident Fund Organization (EPFO) provides free insurance cover on every EPF account. In such a situation, if an employee dies while on the job, his nominee can get financial assistance of up to Rs 7 lakh under this scheme.
If the EPF account holder has not made anyone a nominee, then his legal heirs get the insurance amount equally. All subscribers (members) of EPFO are covered under the Employees Deposit Linked Insurance Scheme (EDLI) 1976. Insurance cover can be provided in case of illness, accident or natural death of the employee.
Insurance amount depends on salary.
The insurance amount received under EDLI scheme depends on the salary of the last 12 months. In case of death of an employee, the nominee gets 30 times the average salary of the last 12 months along with a 20 percent bonus. Of the amount of PF deposited every month from the employee’s salary, 8.33 percent is deposited in EPS, 3.67 percent in EPF and 0.5 percent in EDLI scheme.
There is no benefit on leaving the job.
Under the EDLI scheme, any account holder can get an insurance claim of minimum Rs 2.5 lakh and maximum Rs 7 lakh. To get the minimum claim, the account holder must have been employed for at least 12 continuous months. The benefit of insurance is not given to the account holder who leaves the job.
This insurance on PF account can be claimed only when the PF account holder dies while in service, i.e. before retirement. During this time, whether he is working in the office or on leave. It does not matter.
Making nomination is beneficial.
EPFO subscribers must register the name of the nominee in their account. The biggest advantage of having a nominee in the account is that if an account holder dies, his family does not have to face any problem in availing the benefits of EPF, EPS and EDLI schemes. If there is no nominee, one has to run harder to get the money.
