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EPFO issues clarification on deposit linked insurance scheme — How to claim benefits

EPFO issues clarification on deposit linked insurance scheme — How to claim benefits

EPFO issues clarification on deposit linked insurance scheme — How to claim benefits
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By Anshul  Oct 21, 2022 5:05:42 PM IST (Updated)

Employees’ Deposit Linked Insurance (EDLI) scheme is a mandatory insurance cover provided to all subscribers of the Employees’ Provident Fund (EPF) scheme. Read this to understand how can one nominate members for the same?

Read stories about relatives of some deceased facing difficulties in claiming the life insurance coverage mandated by the Employees' Provident Fund Organisation (EPFO)? Well, the retirement fund body, has recently issued a clarification on this.

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It has been reiterated that an Employees' Provident Fund (EPF) account holder is eligible for assured benefit under the Employees Deposit Linked Insurance (EDLI) scheme, even when someone passes away and thus his/her contribution stops coming onto the holding account.
The EPFO member, however, has to be on the muster roll of the recruiter on the day of death and satisfy other conditions to claim the assured benefit.
This clarification from EPFO comes in the wake of complaints being received under EDLI, where once an employee has passed away while on the job, some offices are rejecting claims on the grounds that the contribution was not received in the prior few days.
The provident fund body has said that due verification should be done in such cases but it should be done within seven days and the family members should not be harassed.
"In cases where the employer states that the member is on the muster rolls and the E0 says otherwise, the reason why the employer version is not acceptable to us should be clearly listed out and examined at office," it said.
What is EDLI?
Employees’ Deposit Linked Insurance (EDLI) scheme is a mandatory insurance cover provided to all subscribers of the Employees’ Provident Fund (EPF) scheme.
Under EDLI, the registered nominee receives a lump-sum payment in the event of the death of the person insured. The claim amount depends on the salary drawn in the last 12 months of the employment of the deceased (this is subject to a maximum of Rs 7 lakh).
The minimum death cover, in this case, is Rs 2.5 lakh.
Under what circumstances can this scheme be availed?
This scheme can be availed on death of the insured, irrespective of change in employment, thereby rendering financial support to the families of the deceased member.
The deceased person should have been an active contributor to the EPF scheme at the time of his/her death.
For the same, it is also important for subscribers to nominate members to the EPF account. This is because only nominated members can withdraw the EPF savings in the event of subscribers' sudden demise. Subscribers can nominate more than one nominee and also fix the percentage of sharing among all such nominees.
And, how can one nominate members for the same?
To avail EPFO's online nomination facility, subscribers must have an active Universal Account Number (UAN) and Aadhaar details should have been seeded to subscribers' EPF account.
Here are the steps to submit the EPF account's nomination details online:
Step 1: Visit the EPFO website and go to 'Services'
Step 2: Now, go to employees and click on 'Member UAN/online service'
Step 3: Log in with Universal Account Number (UAN) and password
Step 4: Under 'Manage tab', select e-nomination
Step 5: Click 'yes' to update the family declaration
Step 6: Click 'Add family details'(More than one nominee can be added)
Step 7: Click on 'nomination Details' to declare the total amount of share. Click 'save EPF nomination'
Step 8: Click 'e-sign' to generate OTP and submit OTP sent on mobile number linked with Aadhaar. With this, e-nomination is done. There is no need to send any physical document to the employer.
How can the nominees claim for this insurance?
EDLI Form 5 IF has to be duly completed and submitted by the claimant for the same. The claim form has to be signed and certified by the employer. The benefits are linked directly to the bank account of the nominee or the legal heir of the employee and is directly credited to this bank account
The EPF commissioner is required to settle the claim within 30 days from the receipt of the claim. Otherwise, the claimant is entitled to an interest of 12 percent per annum.
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