EDLI scheme: Free insurance cover of Rs 7 lakh for EPF members

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Life is full of uncertainties. That’s why life insurance is a very important part of our personal planning. It is all about securing you and your family financially. But do you know that there is a life insurance scheme that covers all the members of the employees’ provident fund (EPF)? Yes, we are talking about the employees’ deposit linked insurance scheme, 1976 (EDLI Scheme). This scheme was launched by the central government in 1976 and managed by Employees’ Provident Fund Organization (EPFO). The main objective behind this scheme is to provide social security benefits to private sector employees.

Enrolment and premium

There is no need for employees to enrol separately for EDLI scheme. All employees who subscribe to the EPF scheme are automatically enrolled for this facility. Age and other individual factors do not affect any employee’s eligibility under this scheme.

No contribution is payable by the employees for availing insurance cover under the EDLI scheme. According to law, the employer makes a contribution which is minimal.

Benefits

In the event of the death of an insured employee during the service period, the nominee is eligible to get the death benefit. If a nominee is not mentioned under the insurance scheme, a legal heir gets the lumpsum pay-out.

A few months ago the benefits payable under EDLI scheme were enhanced by the government without any additional cost to the employees. Now, the nominee or family member or legal heir is eligible to receive a lump sum pay-out of up to Rs 7 lakh in case the insured person dies due to natural causes or accident or illness.

Documents required

The following documents need to be submitted by the applicant to file for a claim under EDLI scheme:

1. Death certificate of an insured person.

2. Copy of cancelled cheque linked to the account where you want to receive the payment.

3. Duly filled form 5 IF.

You can download this form online from the official website of epfo at epfindia.gov.in or click here to download the form.

4. Succession certificate in case the claimant is a legal heir.

5. Guardian certificate in case the claim is made on behalf of a minor by a person who is not the natural guardian of the minor.

The bottomline

The Employees’ Provident Fund Act allows some organisations to opt out from the EDLI scheme. According to law, if companies choose life policies for their employees from other insurers that are more attractive than the EDLI, that company can opt out.