EPFO EDLI Scheme: If you are employed and contributions are made to a PF account from your salary, this news is significant for you. Along with the employee’s contribution, the company also contributes to the fund. Additionally, the EPF account earns compound interest on annual deposits. The account also offers EDLI (Employee Deposit Linked Insurance) benefits, which provide insurance coverage of up to ₹7 lakh. However, having an EPF account does not automatically guarantee EDLI benefits; the scheme has specific conditions that employees should know.
When are EDLI benefits not available on EPF?
Under the EPFO’s EDLI insurance scheme, insurance benefits are not available to PF account holders who are not currently receiving contributions. This means that if you leave your job, the salary-based contributions to your EPF account cease, and the company’s contribution also stops. As a result, EDLI insurance coverage ends. In simple terms, the insurance cover remains valid only as long as the PF account remains active.
Understanding EDLI rules
The EDLI scheme is a special insurance offering from the EPFO. It is available only to employees who are active and registered members of the EPFO. If contributions are being made to your EPF—meaning the company deducts the PF amount from your salary—the company also contributes 0.5% of your salary to the EDLI fund. If the company does not deduct PF from your salary, it will not contribute to the EDLI fund either, meaning you will not be eligible for the insurance cover.
What happens if PF is not deducted?
If you already have a PF account but are working for a company that does not deduct PF from your salary—even if TDS is being deducted—you will not receive the benefits of the EDLI insurance scheme. This means no PF contribution is made from your salary, and the company is not making its contribution to the EDLI scheme either.
Key features of EDLI
EDLI insurance benefits are available in the event of death during employment, but you cannot claim them if your PF account is not active. The insurance cover is provided only if the employee is actively working at the company and regular PF deductions are being made.
If PF contributions stop when you leave the job, you are no longer covered by the EDLI insurance scheme. Furthermore, if PF deductions are being made from your salary, you should regularly check your EPF account to ensure the company is actually depositing your contributions. If the company fails to deposit your contribution, your family will not receive the insurance payout.