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How to Claim the ₹7 Lakh Insurance Benefit from EPFO: If you are employed and a portion of your salary is deducted as PF (Provident Fund) contribution, then this news is truly delightful for you. Most people perceive PF merely as a retirement savings tool; however, the EPFO ​​actually offers a facility for which private insurance companies typically charge a substantial fee. We are referring to the Employees' Deposit Linked Insurance (EDLI) scheme. Through this scheme, you receive free insurance coverage of up to ₹7 lakh—without having to pay any separate premium.

What Does "Zero Premium" Truly Mean?
The most remarkable feature of this scheme is that not a single penny is deducted from the employee's pocket. In contrast, other life insurance policies require you to pay a monthly or annual premium. However, under the EPFO's EDLI scheme, the responsibility for paying the premium lies entirely with your employer. This means that neither is your personal capital invested, nor is any amount deducted from your salary. Instead, it serves as an additional benefit extended to employees by the government.

What Are the Benefits of the Scheme?
If an EPFO ​​member passes away while still in service, their family or designated nominee is provided with financial assistance ranging from ₹2.5 lakh to ₹7 lakh. A significant highlight of this scheme is that even if the employee worked for multiple companies during the 12 months preceding their death, their family remains eligible to claim this amount. In other words, changing jobs or companies does not result in the termination of your insurance coverage.

How Is the Insurance Amount Determined?
The insurance payout received by an employee depends on their "Basic Salary plus Dearness Allowance (DA)" drawn over the 12 months immediately preceding their death. A specific formula is utilized to calculate this amount:

Insurance Amount = 35 times the Salary + a Bonus of approximately ₹1.75 lakh

50% of the PF balance is taken into account, subject to a maximum limit of ₹1.75 lakh.

The salary ceiling for this calculation is capped at ₹15,000.
However, the total payout amount cannot exceed ₹7 lakh.
Who Is Eligible for the Benefit, and How Can One File a Claim? Every employee with an active PF account is covered under this scheme. No separate action is required to enroll in it. However, it is essential to keep your e-nomination details updated in your PF account. If the nominee's details have been provided accurately, the claim is processed quickly and smoothly.

How to File a Claim?
In the event of an employee's demise, the nominee is required to fill out Form 5 IF to claim the insurance benefit. This form can be submitted either through the employer or directly at the EPFO ​​office.

Disclaimer: This content has been sourced and edited from NDTV India. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.