There is a good news for all the employees. The Central Government kicked off the Employees Deposit Linked Insurance Scheme back in 1976 to boost social security for workers. This initiative is managed by the Employees’ Provident Fund Organisation (EPFO) and aims to offer life insurance benefits to private sector employees who are part of the EPFO.
EDLI Scheme
This scheme is rolled out according to the rules set for EPFO members at no cost to them. It covers all organizations registered under the Employees Provident Fund and Miscellaneous Provisions Act, 1952. Employees earning a basic salary of up to Rs 15,000 are automatically included in this scheme.
It’s important to mention that employers are required to contribute 0.5 percent of the employee’s monthly salary to the EDLI scheme, with a maximum salary cap of Rs 15,000. The cool part is that employees don’t have to chip in anything for the EDLI.
The nominee will receive a lump sum insurance payout if the employee passes away while still employed. This amount is based on 30 times the average monthly salary the employee earned over the last year, with a cap of Rs 50,000.
The minimum guaranteed benefit is Rs 2.5 lakh, and it can go up to Rs 7 lakh, depending on the monthly salary limit. This scheme is crucial for providing financial and social security to the families of employees who have died. Additionally, the employer contributes 0.5 percent of the employee’s salary to this fund.
If there’s a better insurance option available, the employer can choose to provide a group life insurance plan that offers equal or greater coverage than the EDLI scheme. The perks of this scheme include the nominee or successor receiving the insurance payout upon the employee’s death.
To initiate the claim, the nominee must submit the claim form along with the necessary documents to the EPFO. The claim amount will be directly credited to the nominee’s bank account. For this, the nominee needs to get Form 5 IF from the EPFO website or their nearest office.