The Employees’ Provident Fund Organization (EPFO) has made important changes in the rules of the Employees’ Deposit Linked Insurance (EDLI) scheme, which will now ensure an insurance benefit of minimum ₹ 50,000 to the family of employees. This change has been made on the recommendation of the Ministry of Labor and Employment so that after the demise of the employees, their nominees/family can get financial security and simple process.
What is EDLI scheme?
The EDLI scheme is a life insurance coverage run by EPFO, which provides a lump sum financial assistance to the nominee or legal heir of an employee working in the organized sector on his death while on the job. Generally this amount is based on the average salary and PF balance of the employee and can range from ₹2.5 lakh to ₹7 lakh.
Main changes of new rules
Minimum sum insured fixed at ₹50,000
Now if an employee dies without completing 12 months of continuous service, or has a balance of less than ₹50,000 in his PF account, his family will still get an insurance benefit of at least ₹50,000. Earlier, in such a situation the basic amount was not available.
Recognition of small service gap
Now a service gap of up to 2 months (60 days), such as holidays or weekend breaks while changing jobs, will not be considered as a break in service and will be counted as continuous service for the benefit of EDLI. This will reduce the chances of the claim being rejected.
Holidays and weekend breaks do not stop claims
EPFO has clarified that Saturdays, Sundays, National/State holidays and other declared holidays will not be considered as break in service for EDLI benefits, unless these result in a break in service.
Non-contributory period included
If an employee dies within six months of his last PF fee contribution and he is on the company’s rolls, the benefit will also be given.
Why the change?
Under the old rules, many heirs were deprived of EDLI benefits due to short job gaps, leaves or technical reasons, especially in cases where the employee had not shown the period of continuous service at the time of changing jobs. The new rules remove these difficulties and simplify the claim process.
Who will get the benefit?
• All employees registered with EPFO, who contribute during their employment.
• If death occurs while in service and within 6 months of PF contribution.
• Claim will be valid even after small service gap.
What will be getting?
• Minimum payout of ₹50,000, even if the PF balance is low.
• The actual amount can be up to ₹2.5 lakh or more depending on the average salary and PF balance of the employee.
