Insurance benefits for EPFO members extended up to Rs 7 lakh

Till April 2021, maximum benefits to legal heirs of a deceased employee was capped at Rs 6 lakh

The government has increased insurance benefits under the Employees' Deposit Linked Insurance (EDLI) scheme for all members of the Employees' Provident Fund Organisation (EPFO). EDLI provides life insurance cover of up to Rs 7 lakh.

 

“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 cover will be effective retroactively from April 28, 2024. The EDLI scheme, initiated in 1976, provides financial assistance to the families of EPFO members in the event of their death. It serves as a crucial safety net, offering peace of mind to members and their loved ones.

 

The scheme introduced a minimum insurance cover of Rs 1.5 lakh in 2018. Until April 2021, the maximum insurance benefits for the legal heirs of deceased members were capped at Rs 6 lakh. However, following a government notification on April 28, 2021, the benefits were enhanced to a minimum of Rs 2.5 lakh and a maximum of Rs 7 lakh, effective for three years.

 

Additionally, the government has relaxed the requirement of continuous service of 12 months in an establishment, ensuring coverage for employees who may have changed jobs in that time.

 

The enhanced benefits were originally set to expire on April 27, 2024.

 

“The EDLI scheme, designed to provide financial assistance to the families of deceased EPFO members, initially capped benefits at Rs 6 lakh. However, in 2021, the cap was raised to Rs 7 lakh for a period of three years. The current extension ensures the continued applicability of these enhanced benefits beyond the original expiration date,” said Jidesh Kumar, managing partner, King Stubb & Kasiva legal firm.