The Employees’ Provident Fund Organisation (EPFO) has announced significant changes to the Employee Deposit Linked Insurance (EDLI) scheme, bringing more financial security to employees and their families. These changes aim to ensure that beneficiaries receive adequate insurance coverage, even if the EPF member has not completed a full year of service.
This update is a huge relief for employees, especially those who frequently change jobs or have short employment gaps. Let’s dive into the new rules, their impact, and what they mean for employees and their families.
EPFO New Rules Major Changes in EDLI Scheme
| Feature | New Changes |
|---|---|
| Minimum Insurance Benefit | Now, even if an EPF member has worked for less than a year, their family is eligible for a minimum payout of ₹50,000 under the EDLI scheme. |
| Benefit Continuity | Employees who stop contributing to EPF are still eligible for EDLI benefits if they pass away within six months of their last contribution. |
| Service Continuity | Even if an employee switches jobs with a gap of up to two months, their service will be considered continuous for EDLI eligibility. |
| Maximum EDLI Benefit | The maximum insurance payout remains ₹7 lakh for eligible beneficiaries. |
The new EPFO rules bring better financial protection for employees and their families. By introducing a minimum payout, extending coverage for ex-employees, and allowing short job gaps, EPFO has made EDLI more inclusive and beneficial.
For employees, staying informed about these changes is crucial to ensure their families are financially protected in case of unforeseen circumstances.
What is the EDLI Scheme?
The Employee Deposit Linked Insurance (EDLI) scheme is a life insurance cover provided by EPFO for salaried employees. If an EPF member dies while in service, their nominee or legal heir gets a lump sum amount as per the EDLI rules.
Who is Eligible?
- Any employee contributing to EPF (Employees’ Provident Fund) is automatically covered under EDLI.
- No additional premium or contribution is required from the employee.
- The employer pays for the insurance cover as part of EPF contributions.
- The insurance amount is calculated based on the employee’s last drawn salary (Basic + DA).
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Major Changes in EPFO’s EDLI Scheme
Let’s break down the latest changes and understand how they benefit employees and their families.
1. Minimum Insurance Benefit Introduced
Before this update, employees had to complete at least one year of continuous service to be eligible for EDLI benefits. Now, even if an employee passes away before completing one year, their family will receive at least ₹50,000.
Example: If an employee joins a company and passes away in just six months, earlier their family would not receive EDLI benefits. But under the new rule, they will now receive a minimum of ₹50,000.
2. Insurance Coverage Even After Leaving Job
Earlier, if an EPF member stopped working and passed away later, their family was not eligible for EDLI benefits. Now, if an employee dies within six months after their last EPF contribution, the family can still claim the EDLI benefit.
Example: Suppose an employee resigns in January 2025, and unfortunately, passes away in May 2025. Their family is still eligible for the insurance payout.
3. Service Continuity Despite Job Changes
Previously, if an employee changed jobs and had a short break between them, they lost EDLI eligibility due to a break in service. Now, a gap of up to two months between jobs will not affect eligibility.
Example: If an employee switches jobs and takes a 45-day break before joining a new company, their service will still be considered continuous for EDLI benefits.
4. EDLI Insurance Limit Remains ₹7 Lakh
The maximum EDLI insurance payout remains ₹7 lakh, ensuring financial security for employees’ families.
Example: If an employee’s last drawn salary (Basic + DA) is ₹30,000, the EDLI payout will be 35 times the salary, i.e., ₹10.5 lakh. However, since the maximum limit is ₹7 lakh, the beneficiary will receive ₹7 lakh.
How to Claim EDLI Insurance?
If an EPF member passes away, their nominee or legal heir can claim the EDLI benefit by following these steps:
Step-by-Step Guide to Claiming EDLI Benefits
- Obtain Form 5 IF: This is the official claim form for EDLI. It can be downloaded from the EPFO website.
- Fill in the Details: The nominee must provide employee details, employer details, and death certificate.
- Employer’s Attestation: The employer needs to attest the claim form and submit it to EPFO.
- Alternative for Unemployed Members: If the employer is unavailable, the claim can be attested by a gazetted officer, magistrate, or bank manager.
- Submit to EPFO Office: The form, along with KYC documents, should be submitted to the nearest EPFO office.
- Claim Processing & Payment: Once verified, EPFO processes the claim and directly transfers the money to the nominee’s bank account.
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EPFO New Rules Major Changes FAQs
1. Is EDLI mandatory for all EPF members?
Yes, every EPF contributor is automatically covered under EDLI. There is no need to enroll separately.
2. Does an employee need to pay for EDLI coverage?
No, the employer pays the premium for the EDLI scheme. Employees do not have to contribute anything extra.
3. What happens if an employee does not nominate anyone?
If an employee hasn’t nominated anyone, legal heirs (spouse, children, parents) can claim the EDLI benefit.
4. How long does it take to get the EDLI payout?
Usually, once the claim is submitted, EPFO processes it within 30 days.
5. Can private companies provide additional insurance instead of EDLI?
Yes, companies can opt for private insurance schemes, but they must provide at least the minimum EDLI benefits.
