EPFO: Good news for EPFO members. Nearly every working individual in India has a PF account. Many people think of it just in terms of the money they get after retiring or as a pension. But there’s another important perk tucked away in the EPF account. The EPFO offers its members free life insurance coverage up to Rs 7 lakh.
Being part of the EPF automatically enrolls you in the Employee Deposit Linked Insurance Scheme (EDLI). This scheme provides a life insurance benefit from the EPFO and is seen as the third major advantage alongside EPF and EPS. The cool part is that employees don’t have to pay any premiums. The employer covers the entire cost, making this benefit completely free. Under the EDLI scheme, the premium is paid by the employer, not the employee.
According to the guidelines, the employer contributes 0.5% of the employee’s salary, which includes basic pay plus DA, to this scheme every month. This deduction is handled directly by the employer, so no money is taken from the employee’s salary. That’s why this scheme is viewed as highly advantageous for workers. This insurance coverage kicks in only if the employee passes away while on duty. It applies no matter the situation, whether at work, at home, or on leave, ensuring that the insurance is fully valid. In such instances, financial support is given to the employee’s family or designated nominee.
The payout under EDLI is split into two segments.
The minimum coverage is Rs 2.5 lakh, while the maximum is Rs 7 lakh. The amount is calculated based on the employee’s average salary over the last 12 months and the balance in their PF account. This scheme is beneficial for every employee whose PF is deducted, whether they are permanent staff or on a contract. Once your PF account is active, you qualify for the EDLI scheme. This benefit is applicable across nearly all sectors in India, providing security for millions of families.