Employees’ Provident Fund Organisation (EPFO) is one of the world’s largest social security organisations in terms of clientele and the volume of financial transactions. Over six crores of salaried individuals are registered with the EPFO and most of them consider it only a mandatory fund-saving tool as their provident fund accumulates in the account under the EPFO. However, very few EPFO subscribers know that they are entitled to FREE life insurance worth up to Rs 7 lakh if they are a member of the EPFO.
Yes, you read it right. EPFO members are covered under free life insurance through the Employees’ Deposit Linked Insurance Scheme (EDLI). The EDLI cover is provided to salaried employees through a combination with EPF and the Employees’ Pension Scheme (EPS). The life cover is decided based on the last drawn salary of the employee. In case of the death of the member, a lump-sum payment, in addition to the accumulated PF, is given to the registered nominee. The nominee registered under the EDLI remains the same as registered in the Employees’ Provident Fund (EPF) Scheme. Those enrolled with the EPFO get automatically enrolled in the EDLI scheme.
According to the EPFO, a maximum assured benefit of up to Rs 7 lakh is paid to the nominee or legal heir of an EPF member, if death occurs while in service. The minimum assurance benefit of Rs 2.5 lakh is paid to the nominee if the deceased member was in continuous employment for 12 months prior to his/her death. The benefit is directly credited to the bank account of the nominee or legal heir.
Under the EDLI scheme, the minimal contribution by an employer is 0.5 per cent of an employee’s monthly wages, up to a wage ceiling of Rs 15,000. An employee need not contribute to this.