On 28 April 2021, the Employees Provident Fund Organisation (EPFO) issued a gazette notification, increasing the all-inclusive assurance benefit to Rs 7 lakh under the (Employee Deposit Linked Insurance) EDLI scheme. Previously, Rs 6 lakh was the limit for the EDLI scheme subscribers. This move has been initiated to help the COVID-19 affected private-sector employees.
EPFO provides EDLI, which is an insurance cover for salaried employees who come under the private sector. A registered nominee will receive a lump-sum amount in the event of the death of an insured person during employment. As a retirement fund, EPFO renders several other benefits, and this is one of the benefits. The EDLI membership is automatically rendered to those who are covered under EPF.
As per the notification, Rs 2.5 lakh will be the minimum assurance benefit payable amount under the EDLI scheme and will be effective retrospectively starting 15 February 2020. Any firm comprising more than 20 employees will need to register for EPF. Hence, an employee with an EPF account qualifies for the EDLI scheme automatically.
EDLI applies to all companies registered under the Employees Provident Fund and Miscellaneous Provisions Act, 1952. All such firms have to subscribe to this scheme and render life insurance benefits to their employees.
No exceptions apply to the insurance coverage rendered by EDLI. It renders protection to an insured person 24×7, across the world. Employers can choose another group insurance scheme; however, the benefits provided must be equal to or more than those provided under EDLI.
To claim this insurance, an EPF account holder should have been still actively employed, i.e., before retirement at the time of his or her demise. The deceased individual has to be an active contributor to the EPF scheme at the time of his/her demise. Irrespective of whether his or her demise happened while on leave or when on vacation or while at work, irrespective of how and when he or she died, a nominee can claim the money.
For claiming the money, a nominee has to submit the following documents:
- A death certificate
- A succession certificate
- A cancelled cheque of a bank account in which the nominee intends to receive the money and the concerned bank details.
In case there is no nominee, a legal heir can claim the amount. A claimant has to fill the EDLI Form 5. The employer has to sign and certify the claim form. In case an employer is not there, or the signature of an employer cannot be obtained, a form has to be attested by any of the following:
- Bank manager (in whose ever branch the account has been maintained)
- Gazetted Officer
- Local MP or MLA
- Magistrate
- Member/Chairman/Secretary of Local Municipal Board
- Member of the regional committee of EPF or CBT
- Post Master or Sub-Postmaster
A claimant has to submit all the documents along with a completed form to the regional EPF commissioner’s office so that the claim gets processed.
Also, a claimant can submit Form 20 (for EPF withdrawal claim), Form 10C/D for claiming all benefits under the three schemes, EPS, EPF, and EDLI. After all, the documents are submitted, and the claim is accepted, the EPF commissioner has to settle the claim in less than 30 days from receiving the claim. A claimant is eligible for interest at 12% p.a. (per annum) until the date of actual disbursal.
The EDLI scheme aims at rendering financial security to the policy holder’s (deceased person) family members. Not many people are aware of this benefit offered concerning EPF subscribers. Most subscribers, as well as nominees, are unaware of this scheme. Therefore, the number of claims received every year are very few. The EPFO portal does not reveal much information about this scheme and the number of claims the portal receives.
When someone who is actively employed and has an EPF account dies due to COVID-19 infection, then his or her heirs qualify to receive money under the EDLI scheme.
With the deadly ongoing COVID-19 second wave, this insurance benefit will significantly help families who have lost their loved ones to the deadly coronavirus.
For any clarifications/feedback on the topic, please contact the writer at bhavana.pn@cleartax.in
Bhavana is a Senior Content Writer handling the GST vertical. She is committed, professional, and has a flair for writing. When away from work, she enjoys watching movies and playing with her son. One thing she can’t resist is SHOPPING! Her favourite quote is: “Luck is what happens when preparation meets opportunity”.
