EPFO Offers ₹7 Lakh Insurance To Employees: Eligibility, Claim Process Explained

Employees enrolled with the Employees’ Provident Fund Organisation (EPFO) are entitled to life insurance coverage of up to Rs 7 lakh under the Employee Deposit Linked Insurance (EDLI) scheme. The most significant aspect of this benefit is that employees do not need to contribute anything toward the insurance premium; instead, it is fully covered by their employer. Despite being a valuable financial safeguard, many employees remain unaware of this provision.

The EDLI scheme operates under the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952, ensuring life insurance coverage for employees in the organized sector. The insurance premium is nominal, with a maximum charge of Rs 75 per month per employee.

Features of the EDLI Scheme

If an employee passes away during his service period, his legal nominee or heir is eligible to receive the insurance payout. Currently, the minimum insurance payout under this scheme is Rs 2.5 lakh, while the maximum is Rs 7 lakh. The final amount is calculated based on the average monthly salary of the employee over the last 12 months.

Who is Eligible?

All EPF members automatically qualify for the EDLI scheme. Employees are not required to make any additional contributions, as the entire premium is borne by the employer. The premium is calculated at 0.5 per cent of the employee’s basic monthly salary. Importantly, this insurance coverage is independent and does not interfere with any other personal insurance policies an employee may have.

Claiming the Insurance: Steps and Documentation

How to File a Claim?

To claim the insurance amount under the EDLI scheme, nominees or legal heirs must submit Form 5IF, along with necessary documents such as the employee’s death certificate and nomination proof. The completed claim form, along with supporting documents, must then be submitted to the relevant EPFO office.

Recent Updates in EDLI Insurance Coverage

Previously, the maximum insurance payout under the EDLI scheme was Rs 6 lakh. However, in April 2024, the Central Board of Trustees (CBT) revised the amount, increasing the minimum payout to Rs 2.5 lakh and the maximum to Rs 7 lakh. This enhancement aims to provide greater financial security to employees’ families in the event of an untimely demise.