The Employees' Deposit Linked Insurance Scheme 1976 (EDLI Scheme) is an insurance scheme which provides life insurance benefits to all employees who are members of the government-backed Employees' Provident Funds (EPF) Scheme, 1952. The EDLI Scheme is supported by a nominal contribution at 0.5% of monthly wages, upto the maximum wage limit of Rs 15,000 by the employers. Employees do not make any contribution for availing insurance cover under this Scheme. How big is the claim, who can claim the benefit under EDLI Scheme and how.
Here's all you need to know about the government-backed EDLI Scheme:
Insurance benefit under EDLI
Nominees or heirs of the deceased member can get a maximum benefit of Rs 7 lakh under the EDLI Scheme. Irrespective of the salary, the minimum insurance benefit under the scheme is Rs 2.50 lakh, if the employee has continuously worked for 12 months.
As per the recent amendment, the insurance benefit is calculated using the following formula:
Average monthly wages drawn during the preceding 12 months x 35 plus 50 per cent of the average PF balance during the last 12 months, subject to a cap of Rs 1,75,000; where, average wages means basic salary plus dearness allowance and monthly wages are capped at Rs 15,000.
Irrespective of the formula, the minimum benefit will not be less than Rs 2,50,000.
Let's understand with an example. Suppose Raghu was earning an average monthly wage worth Rs 18,000 in the 12 months preceding his death and the average PF balance in this period is Rs 2 lakh, the benefit in this case will be Rs 7 lakh (Rs 15,000 x 35 + Rs 1,75,000).
Who can claim insurance benefit?
The benefits under the scheme will be payable to the nominee mentioned by the employee. The nomination under the EPF scheme will be applicable for the EDLI scheme also. If no nomination is made, his spouse, unmarried daughters and minor sons will be beneficiaries.
The following family members are not eligible to claim the benefit:
How to claim insurance benefit?
In order to claim the insurance benefit by the nominee or beneficiary in case of the member's death, he or she has to fill the form 5 IF. The claim form should be attested by the employer. Attested copy of application form along with all supporting documents need to be submitted to commissioner. After verification of application form and supporting documents, the Commissioner will sanction the EDLI claim amount. The benefit amount will be directly credited to the beneficiary's account.
The claimant has to submit the given documents along with Form 51F:
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