The Employees Provident Fund Organization (EPFO) has given a big gift to its PM account holders! An important decision has been taken regarding the Employee Deposit Linked Insurance Scheme (EDLI) of EPFO. Under these new rules, the death claim process has not only been simplified, but the insurance benefits have also been significantly increased. This change will provide financial assistance to thousands of families every year and support them in difficult times.
What is the EDLI scheme
EDLI scheme was started by the government in 1976. The main objective of this scheme is to provide financial security to the family of the employee in case of the sudden death of the employee during the job. Under this scheme, the insurance amount is given to the family of the EPF member on his death. This is a security cover that is helpful for employees in saving as well as in emergencies.
Lifetime security cover
Provident Fund is not only a means of saving for retirement, but it also provides financial support in any emergency during the job. The new provisions of the EDLI scheme work as a strong financial security process for employees. This ensures that even in the absence of the employee, his family does not have to face any financial problems.
New employees will also get benefits
Earlier, if the employee died within a year of starting the job, his family did not get insurance benefits. But now according to the new rules, in such cases also the family will get financial assistance of ₹ 50,000. This is a big relief for those young employees and their families who are just starting their professional journey.
Benefits will continue even after changing jobs
Now if an employee changes jobs and there is a gap of up to two months between two jobs, his insurance coverage will continue. This provision ensures that the financial security of the family of the employees remains even when they change jobs, which is an additional safety net for them.
Coverage up to ₹ 7 lakh
After the change in the scheme, now the limit of the insurance amount has been increased from ₹ 2.5 lakh to ₹ 7 lakh. This amount is decided on the basis of the average salary of the employee for the last 12 months. This unprecedented increase will provide sufficient financial support to the employee’s family in the event of death.
Now less penalty on delay in PF deposit
Not only have the benefits of the employees been increased, but the employers have also got relief. Now the penalty imposed on the employer for delay in EPF deposit has been reduced to only 1% per month. This will provide relief to the companies and ensure that the employees get their benefits on time.
Interest Rate for Financial Year 2024-25
An annual Interest Rate of 8.25% has been declared on EPF for the financial year 2024-25. This will provide better returns to the employees on their investments and help in increasing their retirement corpus.
How to get insurance benefits
If an employee dies during the job, his nominee or legal heir gets an insurance amount ranging from ₹2.5 lakh to ₹7 lakh. Under this scheme, no premium is charged from the employees, rather the employer contributes 0.5%. This scheme is completely free of cost for the employee.
Social security will be strengthened
These changes in EPFO will provide financial relief to the affected families in cases of more than 1,000 deaths during employment every year, and the country’s social security system will be strengthened. It will also increase the sense of security among the employees so that they can work with more confidence and peace.