The Buyt Desk
If you know of someone who was actively employed and died due to COVID-19 then his/her family or legal heirs will be eligible for an insurance claim of Rs 2.5 lakh to Rs7 lakh under the Employee Deposit Linked Insurance (EDLI). This is a mandatory insurance cover provided to all the private sector employees who are contributing to the employee provident fund(EPF). Once an employee starts contributing to EPF he /she automatically becomes a member of EDLI. The Employee Provident Fund Organisation (EPFO) recently increased the maximum limit of insurance under EDLI from Rs 6 lakh to Rs 7 lakh to help families suffering the loss of bread earner of their families.
Rules of EDLI
An organisation with more than 20 employees must have an EPF. Every month an employee and his/her employer both contribute 12% of salary towards EPF. This money is considered to be the retirement fund for private sector employee. But apart from the retirement corpus it also gives financial security to the EPF member and his/her family. The employer contribution is split into two parts wherein one part goes towards Employee Pension Scheme(EPS) and the other part is paid towards EDLI for the insurance cover to the employee. An employer contribution towards EDLI is from 0.5% of the employee’s basic salary. This insurance is payable in case the employee dies of natural death, illness or accident.
How to calculate the Insurance claim?
The quantum of insurance will be 30 times the 12 months average salary drawn by the employee. Apart from this, a bonus will be added to this amount. The minimum insurance payable would be Rs 2.5 lakh and a maximum of Rs 7.5 lakh.
How will the family apply for the claim?
For claiming EDLI cover the nominee/legal heir or the family member have to fill form 5 IF and submit it with the death certificate to the EPFO commissioner. One needs to attach a cancel cheque to the account where the family would want the amount to be credited. The employer will have to certify the form. In case the employer is not their then a gazetted officer, magistrate or postmaster can attest it. Form 5 IF can be downloaded from the EPF website and needs to be filled online. The claim settlement will take around 30 days.
This insurance is available for persons who were working and had not retired. EDLI applies to all the employees getting a salary under Rs 15,000. If the salary is above Rs 15,000 then also the maximum EDLI benefit is capped at Rs 7 lakh only.
