EPFO account holder gets free insurance of Rs 7 lakh, knowing how you can avail the benefit of the scheme.
All EPFO members get coverage under the Employees' Deposit Linked Insurance Scheme (EDLI) 1976. In this, insurance cover can be provided in case of illness, accident, or natural death of the employee. Legal heirs of the employee can get assistance up to Rs 7 lakh. Let us know what are the conditions for availing of this scheme and how the claim amount is calculated.
In today's era, insurance coverage has become very important. With this the financial future of the family becomes secure. This is the reason why most people insure their homes and vehicles as well. But, there is a scheme of the government in which you get the benefit of insurance worth Rs 7 lakh without spending a single penny.
How to get insurance
If you are employed and Provident Fund (PF) is deducted from your salary, then you will get insurance of Rs 7 lakh. The best thing is that you will not have to pay a single rupee as a premium. This insurance is provided by the Employees Provident Fund Organization (EPFO).
All members of EPFO get coverage under the Employees' Deposit Linked Insurance Scheme (EDLI) 1976. In this, insurance cover can be provided in case of illness, accident, or natural death of the employee. In such a situation, the employee's nominee or legal heirs can get assistance up to Rs 7 lakh.
You will not have to pay a single rupee as a premium for the insurance cover.
How is the insurance amount decided?
0.5% of the PF deducted from the employee's salary is deposited in the EDLI scheme. The amount you will get under the ELDI scheme is decided based on your salary for the last 12 months. The claim for insurance cover will be 35 times the last basic salary plus DA. Additionally, a bonus amount of up to Rs 1,75,000 is also available.
For example, if an employee's average salary plus DA for the last 12 months is Rs 15,000. In this case, the claim amount will be 35 x 15,000 i.e. Rs 5,25,000. By adding a bonus of Rs 1,75,000 to this, the total claim amount will become Rs 7 lakh.
How much does one get for an insurance claim?
Under the EDLI scheme, one can get an insurance claim of a minimum Rs 2.5 lakh and maximum of Rs 7 lakh. However, the condition for minimum claim is that the employee should be in continuous employment for at least 12 months. Account holders who leave their jobs do not get this benefit.
Claim on this insurance can be made only in case of death occurring during employment. Whether he is in office or on vacation. But, this insurance claim is not available after retirement. While making an insurance claim, documents like death certificate and succession certificate are asked for.
If the claim is being made by the guardian of a minor, then guardianship certificate and bank details will also have to be given.
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