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EPFO: We often think of PF as just a lifeline or a savings account, but few people know that this account also provides a free security cover for difficult times. EPFO provides its subscribers not only a pension or savings, but also free life insurance up to ₹7 lakh. This facility is available under the EDLI (Employees' Deposit-Linked Insurance) scheme.

Security cover without paying any money
The most important feature of this scheme is that the employee does not have to pay a single penny for it. The entire premium for the insurance provided under the EDLI scheme is paid by your company or employer. As soon as your PF account is opened, you are automatically enrolled in this insurance scheme. You do not have to rush to fill out any separate forms or apply for it. The main objective of this scheme is to protect the family of an employee from a sudden financial crisis in the event of an untoward incident while on the job.

How is the ₹7 lakh amount determined?

Now the question is, how is the insurance amount determined? This calculation depends entirely on the employee's salary. According to the rules, the employee's basic salary and dearness allowance (DA) for the last 12 months are used as the basis. The insurance cover amount is 35 times the average salary, plus a bonus of ₹1.75 lakh.

EPFO has set the maximum salary limit for this calculation at ₹15,000. Multiplying ₹15,000 by 35 results in ₹5.25 lakh. Adding a bonus of ₹1.75 lakh brings the total amount to ₹7 lakh. This is the maximum assistance available under this scheme.

What is required to file a claim?
If a PF account holder dies while in service, their nominee or legal heir can claim the money. The process has now been simplified. For this, the nominee must fill out and submit EDLI Form 5 IF to the EPFO regional office. Documents such as a death certificate, Aadhaar card, bank account details, and proof of date of birth must be attached to the claim.

Relief: EPFO has relaxed the rules, allowing claims to remain unrejected even if the employee has spent some time without salary (a non-contributory period). The department strives to settle claims within 30 days. If there is a delay, EPFO has to pay 12% annual interest to the claimant.

Who receives the money?
The nominee registered in the PF account has the first right to this money. If there is no nominee, the spouse (husband or wife), sons up to 25 years of age, or unmarried daughters can also claim. Therefore, it is very important that you keep e-nomination complete in your PF account, so that in your absence, your family does not have to run around government offices, and they can easily get their rights.

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