EPFO Insurance Scheme: If you are employed and your PF gets deducted then there is good and important news for you. EPFO runs several schemes including the Employees’ Pension Scheme (EPS) for the protection of its account holders. EPFO also provides coverage of up to Rs 7 lakh to its account holders under insurance […]
EPFO Insurance Scheme: If you are employed and your PF gets deducted then there is good and important news for you. EPFO runs several schemes including the Employees’ Pension Scheme (EPS) for the protection of its account holders. EPFO also provides coverage up to Rs 7 lakh under insurance to its account holders.
EPFO runs mainly three such schemes (EPFO Insurance Scheme) for its account holders…
1. There is EPF Scheme (EPF Scheme, 1952), in which the benefit of provident fund is available.
2. Pension Scheme of EPFO (Pension Scheme, 1995) also known as EPS.
3. EDLI: It is also called Employees’ Deposit-Linked Insurance Scheme.
The benefit of EDLI is available to the person from whose salary PF is deducted. This scheme is very important, so it is important to understand it. Under EDLI (EPFO Insurance Scheme), each employee gets an insurance cover of up to Rs 7 lakh, which is deposited in the PF. If an employee dies suddenly, his family gets help of up to Rs 7 lakh under this insurance from EPFO. Its nominee gets its benefit.
A special feature of EDLI is that there is no provision for deduction from salary, as is the case in EPF and EPS. Therefore, many people are not aware of EDLI and its benefits. In EPF and EPS, the employee also has to contribute, whereas in EDLI, contribution is made only by the employer i.e. the company.
Now let us know how much contribution goes in EDLI (EPFO Insurance Scheme) and how it is calculated. Under the EDLI scheme, a contribution equal to 0.5 percent of the employee’s basic salary and DA is made, the maximum amount of which is Rs 75. Even if you change jobs, you continue to get the benefits of this scheme. The condition for this is that you have worked continuously for at least the last one year and your PF is also accumulated.
Now the most important thing is how the coverage is calculated. The employee’s average monthly salary during the last 12 months is the basis and EPFO provides a cover equal to 35 times that average. However, the maximum limit of average monthly salary is Rs 15 thousand.
In this way, 35 times the coverage of Rs 15,000 i.e. Rs 5.25 lakh is automatically provided. On top of that, a bonus of up to Rs 1.75 lakh is given by the organization, taking the total coverage to Rs 7 lakh. If an employee dies, his nominee will get PF, pension and EDLI through a composite claim form. Claim has to be made. In this process, documents like death certificate, succession certificate are required. For payment, a canceled check of the account to which the amount will be sent is also to be given.
