EPFO Updates EDLI Benefits: A 7 Lakh Assurance for Your Family

By expanding the benefits under the Employees' Deposit Linked Insurance (EDLI) program, the Employees' Provident Fund Organization (EPFO) has made a major contribution to guaranteeing improved social security for workers. By maintaining life insurance up to ₹7 lakh, this move is anticipated to benefit more than six crore EPFO members. All the information you require on this upgrade and its consequences may be found here.

The EDLI Scheme: What is it?

The Employees' Provident Funds and Miscellaneous Provisions Act of 1952 established the Employees' Deposit Linked Insurance (EDLI) program in 1976. For workers insured by the Employees' Provident Fund (EPF), it offers a life insurance benefit.

The plan guarantees a lump-sum insurance payout to the employee's family or designated beneficiaries in the case of their untimely death. In contrast to standard insurance plans, this benefit does not require a direct contribution from the employee; instead, the employer contributes a small sum to the EDLI system.

Extension of the Benefits of EDLI

In the past, the EDLI scheme's maximum insurance coverage was limited to ₹6 lakh. However, the government changed the maximum insurance coverage to ₹7 lakh in response to shifting economic conditions and the need for more financial stability. Initially, this increase was declared as a short-term solution during the COVID-19 epidemic. However, the government has now chosen to prolong the ₹7 lakh cover indefinitely, acknowledging the importance of this improvement.

The Extended EDLI Benefits Enhanced Life Cover's salient features include:

• The EDLI scheme's highest insurance payment was formerly ₹6 lakh, but it is now ₹7 lakh.
• Benefits for Nominees: The guaranteed benefit will be payable to the nominee or legal heir in the sad event of an employee's passing.
• No Additional Expense to Workers: No further payments are needed from employees in order to receive this perk. The employer pays for it out of their EPF payments.
• Qualifications: Every employee who participates in the EPF plan is automatically covered by the EDLI plan.
• Regardless of the reason of death—natural, accidental, or otherwise—the insurance coverage is applicable.
• Greater Coverage: More than six crore EPFO members and their families will now get social security thanks to this action.

How is the amount of insurance determined?

Based on the employee's most recent income, the EDLI plan gives the nominee a lump sum payment. The following is the calculation:

• 35 times the average monthly pay (Basic + DA): is the insurance benefit.
• An extra bonus of ₹2.5 lakh: is established.

For example: An employee's insurance payout would be ₹15,000 if their most recent basic plus DA salary was ₹15,000.

• ₹525,000 (₹15,000 x 35).
• An extra bonus of ₹2,50,000.
• ₹7,75,000 is the total insurance payout (subject to the ₹7 lakh maximum).

How Can I Get Benefits from EDLI?

The nominee or legal successor must do the following actions in order to be eligible for EDLI benefits:

1. Send in Form 5(IF): Form 5(IF), which is intended especially for EDLI benefit claims, must be completed and submitted by the nominee or legal successor.
2. Attach the necessary files:
   • The employee's death certificate.
   • Certificate of succession (where appropriate).
   • The departed employee's EPF information.
   • The claimant's KYC documentation.
3. Attestation from the Employer: The employer must attest the claim form. A bank manager or gazetted official may confirm the claim if the employer is not accessible.
4. Send to the Office of EPFO: The regional EPFO office must receive the filled-out form and the necessary paperwork.

To ensure prompt payment of the insurance sum, the EPFO processes claims within a predetermined schedule.

In conclusion

The government's emphasis on enhancing employee social security measures is demonstrated by the increase of the improved EDLI benefits to ₹7 lakh. In addition to giving families financial security during difficult times, this update emphasizes the value of participating in formal work and EPFO programs.

Employers are also essential in making sure that workers understand these benefits and help them or their families apply for them when necessary. With this move, the EDLI program remains an essential component of Indian workers' financial stability.

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