Behavioural biases that damage your investments!
In matters of investment, the sooner you acknowledge your mistakes, the sooner you'll find help in getting out of the soup. To break free from biases, the first step should be to identify those biases, says, Balwant Jain, Tax and Investment Expert.
Apart from being a retirement fund, EPFO offers many more benefits to its members. One such benefit is free insurance cover up to Rs 7 lakh. Covid-19 is also covered in this. If an employee succumbs to Covid-19 while working, the nominee will get the benefit of the EDLI scheme.
The life insurance cover is linked to your PF account. EPFO gives this facility free to all its members. If an EPFO member dies accidentally, the nominee can claim the amount of Life Insurance.
Increase in amount
EPFO members get this facility of insurance cover under the Employee Deposit Linked Insurance Scheme (EDLI Insurance cover). Under this scheme, a nominee can be paid a maximum of Rs 7 lakh under insurance cover in case of death of a member. Earlier its limit was Rs 3,60,000. Later the limit of cover was increased to Rs 6 lakh and in September 2020 last year, its limit was raised to Rs 7 lakh. The bonus limit was also increased from 1.5 lakh to 2.5 lakh rupees.
On the death of an employee, the nominee gets 30 times the average salary of the last 12 months, with a 20% bonus. This means that at the present time, according to the sealing of basic income of Rs 15,000, you will get 30x ₹ 15,000 = Rs 4,50,000. Apart from this, bonus amount of Rs 2,50,000 will also be given to the claimant. In total, this amount can be up to a maximum of Rs 7 lakh.
The process
According to Bhanu Pratap Sharma, Retired Enforcement Officer of EPFO, the PF can claim the nominee for the insurance amount in case of death of the account holder. For this, the insurance company will need to give death certificate, succession certificate and bank details. It can also be taken in case of death due to Kovid-19. If no one has a nominee, then the legal heir can claim this amount. In order to withdraw money from PF account, submit form-5 IF of insurance cover along with the form to be deposited with the employer. The employer verifies this form. After this, you get cover money.
Claims settled
According to EPFO’s Enforcement Officer Gopichand Arora, every year claims for insurance cover are received. But, their number is very less. However, it is very difficult to scrutinize how many claims have been received in the case of Kovid-19. There is a lack of information on this benefit available on EPF account. Most account holders are not aware of this. Even if it happens, their nominee is not aware of it.
This insurance claim on a PF account can be claimed only when the PF account holder has died during the job, ie before the retirement. During this period, whether he is working in the office or on leave. It does not matter. The nominee can claim the money.