PF Account Balance Doesn’t Matter! Family to Receive ₹50,000 Insurance Under EDLI Scheme After Employee's Death

In a significant relief to salaried individuals, the Central Government has revised the rules of the Employees' Deposit Linked Insurance (EDLI) Scheme, ensuring a minimum insurance payout of ₹50,000 to the family of a deceased employee—even if their PF account holds less than that amount.

The Ministry of Labour and Employment has issued an important update for employees covered under the Employees’ Provident Fund Organisation (EPFO). According to the latest guidelines, if an employee passes away while still employed, their legal heirs will receive a minimum insurance payout of ₹50,000 under the EDLI scheme. Previously, this benefit was only available if the employee had at least ₹50,000 in their PF account, but that condition has now been removed.

Key Highlights of the Revised EDLI Rules

• Minimum Insurance Guarantee: In the unfortunate event of an employee’s death during service, the family will receive a minimum sum assured of ₹50,000 under the EDLI scheme, regardless of the PF account balance.

• Employment Gap Relaxation: Even if there is a break of up to 60 days between two jobs, it will still be treated as continuous employment. This ensures the insurance coverage remains intact during short gaps in service.

• No Employee Contribution Required: The employee doesn’t need to make any contribution toward the insurance amount under EDLI. The premium is paid entirely by the employer as part of EPFO compliance.

What is the EDLI Scheme?

The Employees' Deposit Linked Insurance (EDLI) scheme is a life insurance program offered by the EPFO (Employees’ Provident Fund Organisation). It provides financial protection to the family of an EPF subscriber in the event of the employee’s death during the period of service.

The benefit under the scheme is paid in the form of a lump sum insurance amount to the nominee or legal heir of the deceased employee. The scheme is designed specifically for the organized workforce and requires no separate contribution from the employee.

Other Important Changes in EDLI Scheme

1. Job Switch with Short Gap Still Covered
   If an employee leaves a job and joins another within 60 days, the employment will be considered continuous for insurance purposes. This rule ensures that short breaks between jobs do not lead to loss of EDLI benefits.

2. Insurance Validity Post Last Salary
   Another significant revision is that if an employee dies within six months of receiving their last salary, their family is still eligible to receive the insurance benefit under the EDLI scheme. This applies even if the employee was not actively employed at the time of death but had contributed to EPF in the preceding six months.

3. One-Year Continuous Service Rule
   Employees who have served continuously for 12 months are also eligible for insurance under the scheme. The “12-month continuity” is calculated considering the new relaxation regarding 60-day gaps.

Why This Change Matters

These amendments in the EDLI scheme come as a major relief to millions of salaried workers, especially those in lower-income groups. Until now, several deserving families were unable to claim insurance benefits due to technicalities like insufficient PF balance or minor employment gaps. With these new rules, more families will be covered, and the claim process becomes significantly more inclusive and transparent.

Who Can Benefit?

• All salaried employees registered under EPFO.

• Employees who have switched jobs but maintained a break of less than 60 days.

• Families of employees who passed away within six months of their last EPF contribution.

• Even employees with low PF balances are now covered.

Conclusion

The Central Government’s recent update to the EDLI scheme underlines its commitment to securing the welfare of the working class and their families. By removing barriers like PF balance minimums and recognizing short job breaks as continuous employment, the scheme becomes more accessible and impactful. Employees and employers alike should ensure proper nomination and awareness to fully benefit from this initiative.