If I ask you what is EPF or Employee provident fund, then you may think from where I came in to this world. but if I ask you do you know EPF also provide life insurance security for continuing the account? I am sure you might have heard the same thing, like me after Govt has hiked the EPF life insurance premium up to 6 lakhs. In this article I will try to share my knowledge I gained from various sources with common questions can be asked.
Who provide this EPF Life Insurance Cover?
In case you die during your service, your family will get the benefit of this life insurance. This benefits is provided as per Employees’ Deposit Linked Insurance (EDLI) scheme.
How much life insurance cover one can get with this EPF Life Insurance ( EDLI )
As per the EDLI rules, one will get life cover of 30 times of last last drawn salary. The maximum salary limit is set up to Rs 15,000. With that your family will also get a binus of Rs 1.5 lakh.
That means, the life insurance cover for EDLI is calculated as below
30 X 15,000 + 1.5 lakh = 6,00,000 [Maximum life insurance cover]
Do you know how your EPF contribution break-ups?
As per our basic EPF knowledge, employee contributes 12% of salary and rest contribution is from Employer’s side. But do you how employer’s contribution is divided in various segments? Let’s find out.
- 3.67% towards EPF (Employee provident fund )
- 8.33% towards EPS (Employee pension scheme )
- 0.5% towards EDLI (Employee Deposit linked Insurance)
- 1.1% as EPF admin charges
- 0.01% as EDLI admin charges
Out of this calculation, the maximum premium amount is limited up to Rs 0.5% of Rs 15,000 only, which is clear responsibility of your employer only.
How to claim EDLI or Employee Deposit Linked Insurance?
In case of death your family or legal heir will be able to claim the life insurance cover. To claim your insurance follow the step by step guide below.
- Collect the form 5 along with form 20 and form 10D/10C.
- Fill up all the details carefully. Make sure you have mentioned the bank account details clearly as the amount will be transferred to this account only.
- Provide these documents Death certificate, True copy of member nomination form, Legal Heir certificate and Cancel cheque with the application form.
Is EDLI or Employee Deposit Linked Insurance mandatory?
No, it will depend upon your employer. Ask your employer whether they are paying for your life cover also.
What are the alternatives of EDLI or Employee Deposit Linked Insurance?
This is nothing but a group insurance policy only. And there are many such policy from popular insurance companies in India like LIC of India, ICICI, HDFC, Max life and Bajaj Allianz etc. Not only that, you can even look for various social security insurance schemes launched recently like Jeevan Jyoti Bima Yojna, Suraksha Bima Yojna etc.