Very good news has come for the employees and account holders of the Employees Provident Fund Organization (EPFO). Under the EDLI Scheme 1976, a minimum insurance benefit of ₹ 50,000 has been ensured, even if the member has not completed one year of continuous service.
In simple words, now even if the PF balance of an employee is less than ₹ 50,000, the family of the employee will get an insurance benefit of at least ₹ 50,000 in case of his death. For this, recently the Ministry of Labor and Employment has changed the rules of EPFO’s EDLI (Employees Deposit Linked Insurance Scheme). This is a step that will provide financial security to millions of families.
What was the old rule, and what has changed now
Earlier, the rule was that the employee should have at least ₹ 50,000 in his PF account; only then would his nominee get the benefit of insurance. But, the Union Ministry of Labor and Employment has now made it clear that if an employee dies during the job, his family will get an insurance benefit of at least ₹ 50,000, even if the employee does not have that much amount in his PF account. This will directly benefit crores of employees and their families.
A gap of 60 days between jobs will no longer be a hindrance
The ministry has changed another rule of EPFO, under which if there is a gap of a maximum of 60 days between two jobs of an employee, then it will not be considered a gap or interruption in the job. In simple words, a gap of up to 60 days will not have any effect on the calculation of 12 months of continuous service. In this, all jobs will be considered as continuous service, and you will get the full benefit of insurance.
If an employee is a member of the PF scheme (whether it is a normal PF or exempted PF under Section 17) and dies within 6 months of the last PF contribution while on the job, then also the family will be given the insurance amount under this scheme, provided the employee is on the company’s payroll at that time.
What is the EDLI scheme and how to get its benefits
Employee Deposit Linked Insurance Scheme (EDLI) is an important scheme under EPFO, which provides insurance protection to the employees of the organized sector in case of unexpected death during the job. In case of the death of the employee, the legal heir gets a lump sum amount.
Under this scheme, insurance cover of ₹2.5 lakh to ₹7 lakh is given. This scheme specifically covers those EPF account holders who die within one year of employment. Employees who keep changing jobs also get insurance coverage now. The sum insured under EDLI is 35 times the monthly salary received in the last 12 months.