EPFO: Positive developments have emerged for employees. The Government of India introduced the Employees’ Deposit Linked Insurance Scheme in 1976 to enhance social security for workers. This initiative is overseen by the Employees’ Provident Fund Organization (EPFO) and is designed to offer life insurance benefits to private sector employees who are members of the EPF.

EDLI Scheme

The scheme is implemented at no cost to employees who are EPF shareholders, in accordance with established regulations. It applies to all organizations registered under the Employees Provident Fund and Miscellaneous Provisions Act, 1952. Employees earning a basic salary of up to Rs. 15,000 per month are automatically enrolled in this scheme.

Employers are required to contribute 0.5 percent of the employee’s monthly salary to the EDLI scheme, with the maximum salary limit set at Rs. 15,000. Notably, employees do not need to make any contributions to the EDLI.

Nominee will receive a lump sum insurance amount

In the unfortunate event of an employee’s death while in service, the designated nominee will receive a lump sum insurance payout. The benefits are calculated at 30 times the average monthly salary earned by the employee over the preceding 12 months, capped at Rs. 15,000 per month. The minimum assured benefit is Rs. 2.5 lakhs, while the maximum benefit can reach Rs. 7 lakhs, subject to the monthly salary limit. This scheme plays a crucial role in providing financial and social security to the families of deceased employees.

Employers contribute 0.5% of the employee’s salary to this scheme. However, should superior insurance policies be available, employers have the option to implement a group life insurance scheme for their employees, which must provide coverage equal to or greater than that of the EDLI scheme.

In the event of an employee’s death, the nominee or heirs will receive the insurance payout. To initiate this process, the claim form along with the requisite documents must be submitted to the EPFO. The claim amount will be directly credited to the nominee’s bank account. For this purpose, the nominee should obtain Form 5 IF from the EPFO website or the nearest EPFO office.