EPFO Free Insurance: If an EPF subscriber, or member employee, dies prematurely, their nominee or legal heir can claim insurance cover. No payment or premium is required for EDLI.
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EPFO Free Insurance: If you work in the organized sector and your Employees’ Provident Fund (EPF) is deducted, you are covered under free insurance of up to ₹7 lakh. This insurance is available to all subscribers/member employees of the Employees’ Provident Fund Organization (EPFO), which manages EPF. It is provided under the Employees’ Deposit Linked Insurance Scheme 1976 (EDLI), and every EPF account holder is covered under the EDLI scheme. The EDLI scheme also covers the families of employees who have worked for more than one company in the 12 months immediately preceding their death.
The nominee of a member employee can claim insurance in case of death due to illness, accidental death, or natural death. The minimum insurance amount under the EDLI scheme is ₹2.5 lakh. The maximum amount is ₹7 lakh. The employee’s average salary for the last 12 months, plus DA and the amount deposited in their PF account, are considered as the basis for determining the insurance amount.
No money is deducted from the employee’s account for the insurance.
The employee does not contribute any money or premium to the EDLI. The company contributes only 0.50 percent of the employee’s basic salary and dearness allowance. However, keep in mind that the maximum basic salary limit will be ₹15,000, regardless of the employee’s actual basic salary. Claims under the EDLI scheme are paid in a lump sum.
If a nominee is not made…
If the member employee has not made any nomination under the scheme, that is, has not made a nominee, then the benefit of coverage will be available to the spouse, unmarried daughters and minor son/sons of the deceased employee. But it is necessary that the deceased member employee should be an active contributor of EPF, that is, the contribution to PF should be continued on his/her behalf till the time of his/her death.
It should be noted that 12 percent of the basic salary + DA of the employees working in the organized sector goes to EPF as employee contribution. The company/employer also contributes 12 percent. But out of the 12 percent of the employer, 8.33 percent goes to the Employee Pension Scheme i.e. EPS and the rest to EPF.
How to Claim
If an EPF subscriber, i.e., a member employee, dies prematurely, their nominee or legal heir can claim insurance cover. If the claimant is under 18 years of age, their guardian can claim on their behalf. To do this, the insurance company needs to provide the employee’s death certificate, succession certificate, guardianship certificate if the guardian is claiming on behalf of a minor nominee, and bank details. If there is no nominee for the PF account, the legal heir can claim.
Form 5 IF, the insurance cover form, must be submitted along with the form submitted to the employer for withdrawal from the EPF account. This form will be verified by the employer. If verification by the employer is not possible, the form must be verified by one of the persons mentioned below…
Gazetted Officer
Magistrate
Postmaster or Sub-Postmaster
MP or MLA
Chairman of a Gram Panchayat
Member of a Regional Committee of the Central Bank of India (CBT) or EPF
Bank Manager (of the bank where the account was maintained)
Chairman/Secretary/Member of a Municipality or District Local Board
