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Many salaried employees in India associate their Provident Fund (PF) account only with retirement savings. However, few are aware that along with the PF contribution, they are also covered under a free life insurance benefit provided by the Employees’ Provident Fund Organisation (EPFO).

Under the Employees’ Deposit Linked Insurance Scheme (EDLI), eligible PF account holders receive life insurance coverage of up to ₹7 lakh — without paying any additional premium. This lesser-known benefit can offer crucial financial protection to families in case of an employee’s untimely death.

What Is the EPFO EDLI Scheme?

The EDLI Scheme is a social security initiative linked to EPF accounts. It ensures that if an employee passes away during active service, their nominee or legal heir receives a lump sum insurance amount.

The most important feature of this scheme is that:

• The employee does not pay any separate premium.

• The entire contribution toward the insurance cover is made by the employer.

• Coverage is automatic for eligible EPF members.

This means that as long as your employer is contributing to your EPF account, you are automatically covered under EDLI.

Insurance Coverage: How Much Amount Is Paid?

The insurance payout under the EDLI scheme is calculated based on the employee’s average monthly salary (basic + dearness allowance) over the last 12 months of service.

Key Coverage Details:

• Minimum Insurance Amount: ₹2.5 lakh

• Maximum Insurance Amount: ₹7 lakh

• Premium Paid By: Employer

• Employee Contribution: ₹0

The final insurance amount is determined using a formula prescribed by EPFO, but it cannot exceed ₹7 lakh under current rules.

Who Is Eligible for the Benefit?

The EDLI benefit applies to:

• Employees working in the organized sector

• Individuals whose salary includes PF deductions

• Active EPF members at the time of death

If an EPF member dies during employment, their nominee registered in the EPF account can claim the insurance amount. If no nominee is registered, the legal heirs can apply for the benefit.

This makes updating nomination details extremely important for every PF account holder.

Claim Process: How to Apply for EDLI Insurance?

To claim the EDLI insurance benefit, the nominee must follow a specific procedure.

Step-by-Step Claim Process:

1. Fill Form 5 IF
   The nominee must complete Form 5 IF, which is specifically designed for EDLI claims.

2. Submit Through Employer
   The form is submitted to the employer, who forwards it to the EPFO regional office.

3. Attach Required Documents

   • Death certificate of the employee

   • Identity proof of the nominee

   • Bank account details of the nominee

   • Legal heir certificate (if required)

4. Verification and Transfer
   Once EPFO verifies the documents, the approved insurance amount is directly credited to the nominee’s bank account.

The processing time may vary depending on document verification and regional office procedures.

Why the EDLI Scheme Is Important

In India, millions of employees consider PF only as a long-term retirement corpus. However, the EDLI scheme acts as an additional financial safety net.

Key Benefits:

• Provides financial stability to families during sudden loss

• No premium burden on employees

• Automatic coverage with EPF membership

• Quick and structured claim process

In situations of unexpected demise, this insurance support can help families manage immediate expenses and maintain financial stability.

Important Advice for PF Account Holders

If you are contributing to EPF:

• Ensure your nominee details are updated in your EPF account.

• Inform your family members about EDLI coverage.

• Keep personal records and employment documents organized.

Awareness about this hidden benefit can make a significant difference during difficult times.