EPFO Insurance Scheme: If you are a job holder and your PF is deducted, then there is good and important news for you. EPFO runs many schemes along with Employee Pension Scheme (EPS) for the security of its account holders. EPFO also provides coverage of up to Rs 7 lakh under insurance to its account holders […]
EPFO Insurance Scheme: If you are a salaried person and your PF is deducted, then there is good and important news for you. EPFO runs many schemes along with Employee Pension Scheme (EPS) for the security of its account holders. EPFO also provides coverage of 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. EPF Scheme (1952), in which the benefit of Provident Fund is available.
2. Pension Scheme of EPFO (1995) which is also called 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), every 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. His nominee gets the benefit of this.
One special thing about EDLI is that there is no provision for deduction from salary, as is the case with EPF and EPS. Therefore, many people are not aware of EDLI and its benefits. In EPF and EPS, the employee also has to make a contribution, whereas in EDLI, the contribution is made only by the employer i.e. the company.
Now let us know how much contribution is made 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 has also been deposited.
Now the most important thing is how the coverage is calculated. The basis is the average monthly salary of the employee during the last 12 months and EPFO provides cover equal to 35 times that average. However, the maximum limit of average monthly salary in this is Rs 15 thousand. In this way, coverage of 35 times of 15 thousand i.e. Rs 5.25 lakh is automatically provided. Apart from this, a bonus of up to Rs 1.75 lakh is given by the organization, which takes the total coverage to Rs 7 lakh. If an employee dies, then his nominee has to claim PF, pension and EDLI through a composite claim form. In this process, documents like death certificate, succession certificate are required. A cancelled cheque of the account in which the amount will be sent for payment also has to be given.
