scorecardresearchHow does the employees deposit linked insurance scheme protect private

How does the employees deposit linked insurance scheme protect private sector employees

Updated: 22 Aug 2022, 11:31 AM IST

The government implemented a plan to ensure the safety of private-sector workers and provide them with insurance coverage. Read the article to learn more about the eligibility and features of this plan.

EPFO (Employees' Provident Fund Organization) offers Employees Deposit Linked Scheme to private sector employees.

EPFO (Employees' Provident Fund Organization) offers Employees Deposit Linked Scheme to private sector employees.

The current world's challenges have made appropriate insurance coverage essential for everyone. To safeguard the interests of private sector employees, the government launched the Employees Deposit Linked Insurance Scheme (EDLI) in 1976. The EPFO (Employees' Provident Fund Organization) offers this scheme to private sector employees.

This plan operates in tandem with the Employees' Pension Fund and the Employees' Pension Scheme (EPS) and the amount of the benefit is determined by the employee's most recent pay. During the length of service, the registered nominee of the EDLI scheme receives a lump-sum payout in the case of the EPF member's death. The nominee in the EDLI is same as the nominee in the Employees' Provident Fund (EPF) Scheme .

Who all are eligible to receive the compensation?

  • Family members (Nominees) who have been nominated for the EPF Scheme.
  • In the event that no one is nominated, all members of the family are automatically included.
  • Legal heir if there is no family and no nomination.
  • Guardian/family member/legal heir of a minor nominee

What are the features of the EDLI scheme?

If an EPF member dies while on the job, the nominee or legal successor would get a maximum guaranteed benefit of Rs. 7 lakh. However, if the dead member remained in continuous work for 12 months prior to his or her death, the minimum assurance benefit under the EDLI scheme is Rs. 2.5 lakh. Age and other individual criteria have no bearing on an employee's ability to be covered under this plan.

This life insurance benefit is provided free of charge to EPFO members who have a PF/EPF account. Employer contributes 0.5 percent of employee's monthly earnings up to a wage ceiling of 15,000; employee makes no contribution. If the firm has previously chosen a better insurance coverage for its employees under a different plan, the company can opt out of paying to this scheme under Section 17 (2A) of the Act.

What are the documents required to apply?

  1. Completely filled Form 5
  2. The insured person's death certificate.
  3. In the event that the legal heir lodges a claim, a succession certificate is required.
  4. If a claim is brought on behalf of a minor by someone other than the natural guardian, a guardianship certificate is required.
  5. A copy of the cancelled check for the account where the payment will be made

The primary goal of the EDLI scheme is to provide financial stability to the policyholder's family members . Family members include a husband, a son under the age of 25 or an unmarried daughter. The individual cannot pick which of the three pension systems, EPF, EPS, or EDLI, he or she prefers, however they are transferable if the person changes jobs. The new employer will continue to pay into the same account as before.


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First Published: 22 Aug 2022, 11:31 AM IST