The Employees Provident Fund Organisation (EPFO) provides insurance cover for salaried individuals in the private sector through its Employees Deposit Linked Insurance (EDLI) scheme, which functions as a complement to the Employees' Provident Fund and Employees' Pension Scheme (EPF and EPS, respectively). According to reports from Mint, the scheme ensures families receive a lumpsum payout in case of the EPF subscriber's death during the period of service, with benefits calculated based on the insured individual's last drawn salary. The scheme maintains portability across jobs, with accounts transferred from employer to employer similar to EPF and EPS, ensuring continuity of coverage throughout an employee's career.
Eligible EPF members are auto enrolled in the EDLI scheme at no additional cost if more than 20 employees from a firm opt for it. As reported by Mint, the corpus comprises minimum employer contribution of 0.5% of the basic salary or a maximum of ₹75 per month for each employee. The contribution structure includes a maximum contribution capped at ₹15,000 per month if there is no other group insurance scheme. The scheme maintains similar tax benefits as monthly EPF contributions, with contributions subject to tax benefits.
According to Clear Tax calculations reported by Mint, EPF subscribers can claim up to ₹7 lakh benefit from the EDLI scheme, with minimum assurance of ₹2 lakh for continuous employment of at least 12 months prior to death. The payout calculation includes 30 days x average monthly salary of the employee for the last 12 months (capped at ₹15,000) plus an additional bonus of ₹2.5 lakh. For subscribers who die before completing one year of continuous service, the minimum payout provision is ₹50,000 regardless of the PF account balance. The benefit is directly credited to the bank account of the nominee or family, including spouse, unmarried daughters, and sons up to 25 years of age. Notably, for contract and casual workers, the condition of continuous employment has been liberalised, with benefits available to families of employees who may have changed jobs in the last 12 months preceding their demise.
As detailed in the Mint report, claimants must fill and submit EDLI Form 5 IF with signature and certification of the employer. If employer signature cannot be obtained, the form must be attested by bank manager (in whose branch the account was maintained), local MP or MLA, Gazetted Officer, Magistrate, Member/Chairman/Secretary of Local Municipal Board, Postmaster or Sub-Postmaster, or a member of the regional committee of EPF or CBT. The claimant must submit all documents to the regional EPF Commissioner's Office and can also submit Form 20 for EPF withdrawal claim and Form 10C/10D to claim benefits under all three schemes (EPF, EPS, and EDLI). The EPF commissioner must settle claims within 30 days from receipt, with claimants entitled to interest at 12% per annum in case of delay. It is important to add nomination details through the EPFO website and make appropriate updates in case of marriage, childbirth, or changes in nominee details.
