Employee Deposit Linked Insurance Scheme EDLI or EDLI is an insurance cover provided by the Employees’ Provident Fund Organization (EPFO) for the salaried employees of the private sector. The registered nominee receives a lump sum payment in the event of the death of the insured employee during the service period.
Generally, the nominee gets the minimum and maximum assured benefits 2.5 lakh more 7 lakhs respectively. This life insurance benefit is given to all the employees who have subscribed Employees Provident Fund (EPF).
For example, if the employee’s average monthly salary for the last 12 months is maximum 15,000 per month, the salary is multiplied 30 times, i.e., 15,000 x 30 , and a profit of 4.5 lakh is paid to the nominee. In addition, the nominee gets the bonus amount 2.5 lakh, paying maximum under the scheme 7 lakhs.
Archit Gupta, Founder and CEO, Clear said that EDLI is applicable to all organizations registered under the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952. All such organizations should subscribe to this scheme and provide life insurance benefits to their employees. The EDLI scheme works in conjunction with the EPF scheme and the Employees’ Pension Scheme (EPS). “The extent of benefit is decided by the last drawn salary of the employee,” Gupta said.
Process
To claim money from EDLI, the nominees must know whether the deceased employee was an active contributor to the EPF scheme at the time of his death.
It is to be noted here that 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 the nominee with the employer. However, family members or legal heirs can apply even if the employee has not registered a nominee.
At the time of making a claim, the nominee has to submit the duly filled EDLI Form 5IF. The forms can be downloaded from epfindia.gov.in. In addition, the employer has to sign and certify the claim form. Gupta said, “If there is no employer or the nominee is not able to obtain the signature of the employer, the nominee should obtain the form attested by the 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 Regional Committee of EPF or CBT.”
In addition, the nominee can also submit Form 20 (for EPF withdrawal claim) and Form 10C/D to claim all benefits under three schemes, EPF, EPS and EDLI schemes.
Thereafter, the nominee has to submit all the documents and filled forms to the office of the Regional EPF Commissioner. 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 does not settle the claim in time, the nominee is entitled to interest at the rate of 12% per annum till the actual disbursement,” Gupta said.