EPFO, or the Employees' Provident Fund Organisation, has made a significant decision, providing relief to millions of salaried individuals and their families. Now, even if there are insufficient funds in the PF account after an employee's death, the nominee will still receive insurance benefits. This benefit will be provided under the Employee Deposit Linked Insurance (EDLI) scheme. Previously, there were certain conditions for this scheme, but now the rules have been simplified.
Insurance Guarantee Even After Death
According to the new rule, if an employee dies within six months of receiving their last salary, their nominee will receive insurance money under the EDLI scheme. This means that even if the employee's job was lost for some reason, and they die after that, the family will still receive the benefit, provided that the event occurred within six months of the last salary.
Benefits Even If There Is No Money In The PF Account
Until now, it was necessary for the employee to have at least ₹50,000 deposited in their PF account to avail of this scheme. If this condition was not met, the family would not receive the insurance amount. But now this condition has been removed. This means that whether there is any amount in the PF account or not, if the other conditions are met, the nominee will definitely get a benefit of at least ₹50,000.
Break Up To 60 Days Will Not Be Considered An Interruption
EPFO has made another important change, which is for employees who have worked in different companies. Often there is a break of a few days while changing jobs. Previously, it was believed that if there was a gap in service in between, the employee would not get the benefit of the EDLI scheme. But now, under the new rule, if there is a gap of up to 60 days between two jobs, it will not be considered an interruption in service. This means that even during this period, the employee's service will be considered continuous and the insurance cover will remain in place.
What is EDLI Scheme?
Employee Deposit Linked Insurance Scheme i.e. EDLI, is an insurance scheme run under EPFO. Its purpose is to provide financial assistance to the family of an employee if they die untimely during their service. This insurance is entirely provided by the employer, and the employee does not have to pay any money for it.
Under this scheme, a lump sum amount is given to the legal heir or nominee of the employee upon their death. This amount can range from a minimum of ₹2.5 lakh to a maximum of ₹7 lakh. This insurance amount depends on the employee's last salary and length of service.
Who Will Get The Benefit of The Scheme?
All employees working in the organized sector who are members of EPFO get the benefit of this scheme. No separate nomination is required in this. If the employee's PF account continues to be contributed to, they remain covered under the EDLI scheme.
Now, under the new rules, even if an employee's PF contribution stops, insurance benefits will be available in the event of death within six months of the last salary. Also, if they have not joined a new job but it has been less than 60 days since leaving the previous job, they will still be considered covered under the scheme.
How Much Insurance Amount Can Be Received?
The insurance amount under the EDLI scheme is calculated based on the employee's last salary. If the employee has completed 12 months of continuous service and their last salary was ₹15,000, then the maximum insurance cover can be up to ₹7 lakh. The minimum insurance amount has now been guaranteed at ₹50,000, which will provide relief to the families of employees with low salaries or short-term jobs.
Where Can The Claim Be Made From?
The nominee or legal heir can claim this insurance by visiting the regional office of EPFO. The necessary documents for this include death certificate, service certificate, nominee's identity card, bank account details, etc. EPFO provides the facility to claim both online and offline.
Impact of New Changes Related to The Scheme
A large number of employees and their families will benefit from these changes made by EPFO. Especially those families who fall into financial crisis after the untimely death of the employee, will now definitely get relief of at least ₹50,000. Also, the insurance cover will not be broken now due to small gaps in service.
