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EDLI Scheme: If you are employed and contribute to EPFO ​​every month, then you should know that the Employees Provident Fund Organization provides free insurance up to Rs 7 lakh to EPFO ​​members. This insurance scheme is known as Employees Deposit Linked Insurance (EDLI). This scheme is run to provide financial security to the employee's family.

If for any reason an EPFO ​​member dies, then his successor or nominee can claim this insurance amount. However, the claim amount of Rs 7 lakh is not given to everyone. Its calculation is done through a formula. Here are some rules related to EDLI and the formula for deciding the claim amount.

The employee does not have to pay a premium.

This insurance coverage is free for any employee working in a private company. The contribution for this scheme is made by the company, which is 0.50 per cent of the employee's basic salary and dearness allowance. Usually, people are aware of PF money and pension schemes but are not aware of the EDLI scheme.

The amount is decided by this formula.

In this scheme, which gives free insurance up to a maximum of Rs 7 lakh, the calculation of the claim amount is decided under a certain formula. The insurance amount depends on the basic salary and DA of the last 12 months. The claim for insurance coverage will be 35 times the last basic salary + DA. Along with this, a bonus amount of up to Rs 1,75,000 is also paid to the claimant. For example, if the basic salary + DA of an employee in the last 12 months is Rs 15000, then the insurance claim amount will be (35 x 15,000) + 1,75,000 = Rs 7,00,000.

How to claim

If an EPF subscriber dies untimely, then his nominee or legal heir can claim insurance coverage. For this, the nominee should be at least 18 years of age. If it is less than this, the guardian can claim on his behalf. While making a claim, documents like a death certificate and succession certificate are required. If the claim is being made by the guardian of the minor, then a guardianship certificate and bank details have to be given.

Rules related to EDLI

The EPFO ​​member is covered by the EDLI scheme only as long as he is employed. After leaving the job, his family/heirs/nominees cannot claim it.

If the EPFO ​​member has been working continuously for 12 months, then after the death of the employee, the nominee will get a benefit of at least 2.5 lakhs.

A claim can be made regarding EDLI in case of illness, accident, or natural death of the employee while working.

If there is no nomination under the EDLI scheme, then the spouse, unmarried daughters, and minor son/sons of the deceased employee are considered beneficiaries.

Form 5 IF of insurance cover has to be submitted along with the form to be submitted to the employer for withdrawing money from the PF account. The employer verifies it.