The EDLI scheme works in combination with the EPF scheme and the Employees‘ Pension Scheme
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Employees Deposit Linked Insurance Scheme or EDLI is an insurance cover provided by the Employees Provident Fund Organization (EPFO) for private sector salaried employees. The registered nominee receives a lump-sum payment in the event of the death of the employee who is insured during the service period.
Typically, the nominee gets minimum and maximum assured benefits of ₹2.5 lakh and ₹7 lakh, respectively. This life insurance benefit is given to all employees who have subscribed to Employees‘ Provident Fund (EPF).
For instance, if the employee’s average monthly salary for the last 12 months is capped at ₹15,000 per month, the salary is multiplied 30 times, i.e., ₹15,000 x 30 , and the benefit of ₹4.5 lakh is paid the nominee. In addition to this, the nominee gets a bonus amount of ₹2.5 lakh, making the maximum payout under the scheme at ₹7 lakh.
Archit Gupta, founder and CEO of Clear, said that EDLI applies to all organizations registered under the Employees Provident Fund and Miscellaneous Provisions Act, 1952. All such organizations must subscribe to this scheme and offer life insurance benefits to their employees. The EDLI scheme works in combination with the EPF scheme and the Employees‘ Pension Scheme (EPS). “The extent of the benefit is decided by the employee’s last drawn salary," said Gupta.
To claim money from EDLI, nominees must know if the deceased employees had been active contributors to the EPF scheme at the time of their deaths.
It should be noted here that the EPFO covers employees under this scheme even if they shift jobs and work for another employer before completing one year of service. Employees need to register a nominee with the employer. However, family members or legal heirs can apply even if the employee has not registered a nominee.
While making claims, the nominee has to submit a duly filled EDLI Form 5IF. The forms can be downloaded from epfindia.gov.in. Further, the employer must sign and certify the claim form. Gupta said, “If there is no employer or the nominee isn’t able to get the signature of the employer, the nominee should the get the form attested by either bank manager (in whose branch the account was maintained), local MP or MLA, gazetted officer, magistrate, member/chairman/secretary of local municipal board or member of the regional committee of EPF or CBT."
Besides, the nominee can also submit Form 20 (for EPF withdrawal claim) and Form 10C/D to claim all the benefits under the three schemes, EPF, EPS and EDLI schemes.
Thereafter, the nominee will have to submit all documents and completed forms to the regional EPF commissioner’s office. Once all the documents are provided and the claim is accepted, the EPF commissioner settles the amount within 30 days of receipt of the claim. “If the EPF commissioner doesn’t settle the claim on time, the nominee is entitled to interest at 12% per annum until actual disbursal," said Gupta.