The Employees’ Provident Fund Organization (EPFO), retirement fund body, has recently hiked the maximum sum assured payable under the Employees’ Deposit Linked Insurance (EDLI) scheme to Rs 7 lakh. The minimum death cover has been increased to Rs 2.5 lakh effective retrospectively from February 15, 2020. These new limits are in effect for three years from April 28, 2021. The Ministry of Labor and Employment had on February 15, 2018 through a notification increased the minimum assurance benefit ceiling to Rs 2.5 lakh under the EDLI scheme for a period of two years, which expired on February 15, 2020. Therefore, for the purpose of giving continuity to the said benefit, the amendment has been notified again to give effect to that retrospectively from February 15, 2020, which will not adversely affect the interests of any person.
In view of this, let’s understand this scheme in detail:
What is the Employees’ Deposit Linked Insurance (EDLI)
scheme?
EDLI is one of the schemes formulated under the Employees’ Provident Fund and Miscellaneous Provisions Act (EPF and MP Act), 1952. It was originally launched in 1976. It is available for all private-sector salaried employees. Under this, the registered nominee receives a lumpsum payment in the event of the death of the person insured, during the period of the service.
How is the extent of benefit of EDLI decided?
The extent of the benefit is decided by the last drawn salary of the employee.
Why has the amendment been done?
This amendment is aimed at providing additional succour to families and dependents of members of the scheme in case of their unfortunate death while in service.
How is it calculated?
The insurance amount that the heirs of a deceased member get, according to Paisabazaar, is calculated as 30 times the average monthly salary in the last 12 months of employment. The maximum average monthly salary of an employee is capped at Rs 15,000. So, 30 times the salary comes to be around to be 35 x Rs 15,000 = Rs 5,25,000. A bonus amount of up to Rs 1,75,000 is also paid to the claimant under this scheme. Thus, the total amount payable under this scheme to the beneficiary is Rs 7,00,000
How to claim the benefits under EDLI?
According to ClearTax, the benefits under EDLI can be claimed by the nominee specified by the insured person. If no nominee is registered, then the family members or legal heirs can apply for the same. The deceased person should have been an active contributor to the EPF scheme at the time of his/her death. EDLI Form 5 IF has to be duly completed and submitted by the claimant. The claim form has to be signed and certified by the employer. Any additional documents required must be furnished at the earliest to process the claim, ClearTax mentioned.
Once all the documents are provided and the claim is accepted, the EPF commissioner must settle the claim within 30 days from the receipt of the claim. Otherwise, the claimant is entitled to an interest of 12 percent per annum.
Source : www.cnbctv18.com
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