Employers offering term insurance of HDFC, IDBI Federal or IndiaFirst are entitled to exemption from contributing towards Employees' Deposit Linked Insurance Scheme as EPFO has found policy benefits of these three companies are better than those under EDLI-1976.
"On careful examination of the proposal...It has been found that benefits conferred by their policy is better than the benefits under the EDLI-1976. Therefore, those employers opt for their policy...Shall be entitled for grant of exemption from EDLI-1976," an office order said.
The Employees' Provident Fund Organisation (EPFO) has asked it field formations to inform employers in their jurisdictions about the insurance products of the three companies for the purpose of seeking exemption from contributing towards EDLI-1976.
All employers are mandated to contribute 0.5 per cent of the basic wages of their workers towards EDLI-1976. Under the scheme, the employees of a firm are provided life insurance cover.
EPFO has recently increased the maximum sum assured under the EDLI scheme to Rs 3.6 lakh. The insurance money to paid to the nominee of all contributing members on their demise during service period.
The EPFO's apex decision making body, the Central Board of Trustees, in 2002 had decided to allow insurance companies in the private sector coming under the regulatory control of IRDA to offer group insurance conferring similar or better benefits than EDLI 1976.
Some companies have been subscribing to the term insurance schemes run by the private companies for availing exemption from contribution towards EDLI.
