Do you contribute a part of your salary to the Employees Provident Fund (EPF)? If yes, you are eligible for life insurance up to ₹7 lakh under the Employees Deposit Linked Insurance (EDLI) scheme.
In other words, if an EPF member passes away while in service, the Employees Provident Fund Organisation (EPFO) will give their nominees or legal heirs up to ₹7 lakh, depending on the employee’s service period and last 12 months of salary.
Also, unlike with EPF, in which employees contribute 12% of their basic salary and dearness allowance (PF wages), you don’t have to pay any premium for EDLI. Employers contribute 0.5% of each employee’s PF wages, up to a maximum of ₹75 per employee per month, to enrol them under EDLI. Employers cannot charge you for this premium or deduct it from your salary.
The EPFO recently proposed some changes in the EDLI scheme, which, once implemented, will offer enhanced benefits to thousands of EPF members.
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What are the proposed changes to the EDLI scheme?
- Currently, an EPF member should have completed at least 12 months of continuous service in one or more establishments to be eligible for EDLI benefits. If the proposed changes are accepted, their nominees or heirs will be entitled to receive ₹50,000 even if the EPF member’s service period was less than 12 months. For employees who have completed at least 1 year in service, the minimum benefit is ₹2.5 lakh.
- EDLI benefits can be denied if an EPF member switches jobs within one year and takes a short gap of even one or two days in between, including weekends or holidays. EPFO has proposed to allow a gap of up to two months between two periods of employment to be considered as continuous service, ensuring eligibility for EDLI benefits.
- EDLI benefits are denied if a deceased EPF member had a break in PF contributions, because that is considered as death outside of service. Under the proposed changes, if an EPF member passes away within six months of their last PF contribution, EDLI benefit will still be applicable if their name is not struck off from the employer’s rolls. EPFO says this is expected to benefit more than 14,000 such cases every year.
“For example, if an employee stops contributing to EPF due to unpaid leave but remains on the employer’s payroll with non-contributory period (NCP) days, their name is not removed from records. In such a case, they will still be eligible for EDLI scheme benefits,” said FinRight, a PF consulting firm.
The Central Board of Trustees, chaired by Union labour minister Mansukh Mandaviya, approved the proposed revisions during its 237th meeting in February. An EPFO official informed Mint that the draft has been sent to the government for notification. “It has been approved and will soon be notified,” the official said.
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Add your nominees online
E-nomination for the EDLI scheme is simple. Log in to the EPF member portal with your UAN (Universal Account Number) and password, and go to the ‘e-nomination’ section under ‘Manage’. You’ll need to add your family members, upload their photos, and enter their Aadhaar numbers. The system verifies Aadhaar data against name, date of birth, and gender. Only on successful verification will the family members be added.
“Form 2 is used for nominations. It has two parts—Part A and Part B. Part A covers EPF nominations, while Part B is for EPS nominations. Nominees listed in Part A are also eligible for EDLI benefits,” said Adarsh Vir Singh, founder of social security consulting firm Nidhi Niyojan.
Who can be your nominees?
Nominees for EPF and EDLI benefits have to be the same. Under EPF, ‘family’ includes dependent father, dependent mother, wife, sons (including adult sons), daughters (including married ones), deceased son’s widow, deceased son’s sons, and deceased son’s daughters. Female members may also nominate their husband’s dependent parents. Both male and female members can state in writing if they want to exclude their spouse—or, in the case of women, the husband’s parents—from the definition of ‘family’.
How to claim EDLI benefits
While making claims, a nominee has to submit EDLI Form 5 (IF). Forms can be downloaded from epfindia.gov.in. Further, the employer must sign and certify the claim form. Beneficiaries can make the claim online too if the EPF member had filled in an e-nomination. Look for ‘Death claim filing by beneficiary’ on the EPFO member portal on the bottom right to start the process.
Enter the EPF member’s UAN, the beneficiary’s name, Aadhaar number, and date of birth. Aadhaar must be linked with a valid phone number for OTP verification.
The following documents have to be enclosed when making a claim:
- Death certificate
- Guardianship certificate if nominee/legal heir is a minor
- Succession certificate if claim is by a legal heir
- Copy of a cancelled/blank cheque of the bank account
- Exempted employers to share PF details of the last 12 months along with an attested copy of the nomination form.
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