EPFO: EPFO members' insurance benefits hiked up to Rs 7 lakh. Check details

EPF benefits: The government has announced an increase in insurance benefits for all members of the Employees' Provident Fund Organisation (EPFO) under the Employees' Deposit Linked Insurance (EDLI) scheme. The enhanced scheme provides life insurance cover of up to Rs 7 lakh. The increased coverage under the EDLI scheme will be applied retroactively from April 28, 2024.

Established in 1976, the scheme offers financial support to EPFO members' families in case of their demise, serving as a vital safety net providing peace of mind to both members and their loved ones.

“Many families rely on the income of EPFO members, and having robust life cover can significantly alleviate the financial strain in the event of a tragedy,” said Vishal Gehrana, principal associate, Karanjawala & Co. and advocate on record, Supreme Court.
 
“It is rather encouraging to see the government taking proactive steps to address these concerns but it is equally crucial to prioritise transparency and efficiency in the rollout of these benefits. Ensuring that beneficiaries can easily access their entitlements will be key to building trust and confidence in our social security systems,” he said.

The increased coverage under the EDLI scheme will be applied retroactively from April 28, 2024. Established in 1976, the scheme offers financial support to EPFO members' families in case of their demise, serving as a vital safety net providing peace of mind to both members and their loved ones.

In 2018, the scheme introduced a minimum insurance cover of Rs 1.5 lakh, with a previous cap of Rs 6 lakh for the legal heirs of deceased members up to April 2021. However, a government notification dated April 28, 2021, raised the minimum benefit to Rs 2.5 lakh and the maximum benefit to Rs 7 lakh for a period of three years.

Furthermore, the government has eased the requirement for continuous service of 12 months in a single establishment, ensuring coverage for employees who may have changed jobs during that time.

Union Labour Minister Mansukh Mandaviya recently revealed the extension of the enhanced insurance benefits to all EPFO members. This initiative will now offer up to Rs 7 lakh of life cover to over 6 crore EPFO members.

The extension of the scheme will be effective from April 28, 2024, onwards, according to Mandaviya. The EDLI Scheme, which was established in 1976, aims to provide insurance benefits to EPFO members to offer financial assistance to their families in the event of the member's demise.In 2018, the minimum insurance cover of Rs 1.5 lakh was introduced under the scheme. Till April 2021, the maximum benefits to the legal heir of the deceased employee was capped at Rs 6 lakh as per the criteria defined in the EDLI Scheme.

The government, by a notification dated April 28, 2021, increased the minimum and maximum benefits under the scheme to Rs 2.5 lakh and Rs 7 lakh, respectively, for the next three years. Additionally, the requirement of 12 months of continuous service in a single establishment was relaxed to accommodate employees who changed jobs within that timeframe.

These revised benefits were applicable for the three-year duration ending on April 27, 2024.