InvestorQ : What is the newly introduced Insurance cover for the EPF account holders?
Ishita Jain made post

What is the newly introduced Insurance cover for the EPF account holders?

Anjali Desai answered.
11 months ago
The Employees’ Provident Fund Organisation (EPFO), has hiked the maximum assurance benefit under the Employees’ Deposit Linked Insurance (EDLI) scheme from ₹6 lakh to ₹7 lakh. Furthermore, the minimum death insurance benefit under the EDLI scheme has been raised from ₹2 lakh to ₹2.5 lakh. 

As per the EPFO, they will extend the benefits payable under the scheme to the beneficiaries where the deceased employee was a member of the provident fund. Moreover, the employee must be exempted under Section 17 of the EPF & MP Act aid along with being employed for 12 months preceding the month in which he/she died, irrespective of change of establishment during the said period. Now, the nominee of the employee who passed away will get a lump sum amount of ₹7 lakh when maximum benefits are claimed in case the death is because of natural causes, illness or accident. 

Under the scheme, the insurance cover entirely depends on the average drawn salary of the past 12 months prior to the passing of the employee. However, an employee is not required to contribute to the deposit linked insurance scheme to get the benefits but the employer pays the premium amounting to 0.50% of the employee’s monthly wages up to a maximum limit of ₹15,000. 
Any employee’s nominee can claim a lump sum amount of 30 times the average monthly salary in the past 12 months or ₹7 lakh, whichever is lower. For example, if the average salary for the past 12 months is ₹22,000, you can claim 30x, i.e. ₹6,60,000 with an upper limit of ₹7 lakhs.