Most Indians are not aware of the Free Life Insurance Policy of the Employees Provident Fund Organisation (EPFO), although it is a very beneficial scheme. If your Provident Fund (PF) gets depleted, then you get free life insurance cover of up to Rs 7 lakh. EPFO provides this facility under the ‘Employees’ Deposit Linked Insurance’ (EDLI) scheme.
The EDLI scheme was launched by EPFO in 1976. The main objective of this scheme is to provide social security to PF account holders. In such a situation, it is important to know that a PF account is not only a means of accumulating funds after retirement but also a strong and free means to maintain the financial stability of the family in times of crisis. It is a reliable security cover for the future of the family of the PF account holder.
Under this free life insurance scheme, the employed employee has to pay 0 premium; that is, no premium has to be paid for it. No money will be deducted from the employee’s salary for this. Rather, this money will be given by the company (employer). The company will deposit 0.50% of the employee’s basic salary and dearness allowance (Basic + DA) in the insurance scheme. In case of accidental death of the PF account holder, the nominee will get a lump sum of a minimum of Rs. 2.5 lakh and a maximum of Rs. 7 lakh.
To avail the benefit of the free life insurance scheme, the PF account holder will have to work in a company continuously for 12 months; that is, the employee will get the benefit of this scheme only if he has been working in the company for 12 months before his death. Although the employee will get the benefit of this scheme even after changing the company before the completion of 12 months, for that he will have to keep his account active. The sum assured will be available only if the employee’s death occurs during the service period, i.e., while in service.
