If PF is deducted from your salary, you also have insurance coverage up to Rs. 7 lakh. Learn how to avail this benefit.
PF Account Insurance: If PF is deducted from your salary, you're not just saving, but you're also automatically covered by free life insurance up to Rs. 7 lakh.
Millions of people in India are employed, and PF is deducted from their salaries on a monthly basis. For most employees, PF has simply become a routine deduction from their salary. Very few people know that this PF account provides them with crucial security cover in addition to retirement savings.
People often consider PF only as future savings. But a free life insurance policy is automatically linked to the PF account. No separate application is required, nor is any premium to be paid. This benefit is automatically available to every active PF member.
This facility is provided by EPFO under the Employee Deposit Linked Insurance Scheme (EDLI). It is considered the third major benefit after EPF and EPS. As soon as your PF account becomes active, you come under the purview of this insurance scheme.
The biggest advantage of this insurance is that the employee does not have to pay a single rupee for it. The entire cost is borne by the company. The company deposits 0.5 per cent of the basic salary and DA into EDLI every month. This deduction is not made from the employee's salary.
The benefit of EDLI is available only if the employee dies during their employment. Whether the incident occurs at the office, at home, or during leave, the insurance cover remains applicable in every situation. In such a case, financial assistance is provided to the family or nominee.
Under EDLI, the minimum cover is Rs. 2.5 lakh and the maximum cover is up to Rs. 7 lakh. The amount is determined based on the salary and PF contributions of the last 12 months. The more stable the salary and contributions, the better the cover.
Most people are unaware of this facility, even though it is a crucial security cover for salaried individuals. So, if you or someone you know is a PF member, be sure to inform them about this benefit. This will provide financial assistance in case of unforeseen circumstances.
