EPFO: The Employees’ Provident Fund Organisation (EPFO) is more than just a savings tool for retirement; it serves as a vital support system for families during difficult times. While many view the PF account solely as a retirement fund, few realize that EPFO also offers complimentary life insurance and family Pension protection to its members. In the unfortunate event that an EPFO member (employee) passes away while employed, their family or nominee can benefit from these provisions.
EPFO provides various advantages to help families navigate financial hardships. Unfortunately, due to a lack of awareness, many families miss out on claiming these benefits. There are numerous questions and uncertainties surrounding this issue, such as whether the family will receive Rs 7 lakh in insurance or a monthly pension. Let’s explore the answers to the five most pressing questions regarding EPFO Death Claims.
Is there truly a Rs 7 lakh insurance coverage for the death of an EPFO member?
Absolutely! Under the EPFO’s ‘Employee Deposit Linked Insurance Scheme’ (EDLI Scheme), all PF account holders are entitled to free life insurance. No deductions are made from the employee’s salary; the employer covers the entire premium. If a member passes away while still employed, their nominee or legal heir is eligible for a death benefit of up to Rs 7 lakh. The minimum benefit under this scheme is Rs 2.5 lakh, ensuring that even if an employee has a brief tenure, their family will receive at least Rs 2.5 lakh in insurance claims.
Will the family also receive a monthly pension?
Many individuals mistakenly believe that insurance and pension are the only benefits available, but this is not the case. When an EPFO member dies, their family is entitled to both the insurance payout and a monthly pension. Following the employee’s death, their spouse is eligible for a lifelong ‘widow/widower pension’. Additionally, the member’s children (up to a maximum of two children until they attain the age of 25) are also entitled to a monthly children’s pension. If the employee was unmarried, his/her parents may be eligible for this pension. This pension is determined under the rules of EPS-95 (Employees’ Pension Scheme).
How does the family get the entire amount deposited in the PF account and the interest on it?
Apart from insurance and pension, any amount deposited in an employee’s Provident Fund (PF) account is completely safe. Upon the member’s death, the total amount deposited in the account and the interest earned on it (such as the EPFO’s recommended interest rate of 8.25% for the financial year 2025-26) is transferred to the nominee in a lump sum. To receive this money, the nominee must fill out Form 20. Additionally, to withdraw the amount deposited in the EPS account, Form 10D (for pension) or Form 10C (if the service period is less than 10 years) must be submitted.
How and where will the family have to make the claim to avail all these benefits?
After the death of an EPFO member, the family does not need to run around separately to receive all these benefits (PF, pension, and EDLI insurance). EPFO has issued a composite claim form for this purpose. The nominee must fill out this form along with the employee’s death certificate, bank account passbook, Aadhaar card, and signatures of witnesses and submit it to the concerned EPFO office.
If the employer (company) is not cooperating, the nominee can also file the claim directly by going to the local PF Commissioner to get their documents verified. If all the documents are in order, EPFO transfers the claim amount directly to the beneficiary’s bank account within 30 days.
