The Employees Provident Fund Organisation (EPFO) has announced on Wednesday it is going to help one crore employees in India. It has enhanced the maximum assurance benefit under the Employees’ Deposit Linked Insurance (EDLI) scheme to Rs 7 lakh from the existing cover of Rs 6 lakh.
What Does The Hike In Assurance Mean?
Financial planner Suresh Surana welcoming the move said: “Considering the current COVID-19 crisis and need for financial stability, the decision is an appropriate step. He also added that it is a mandatory insurance cover provided to all EPF scheme subscribers. On the death of the subscriber the nominee shall get a lump sum payment of up to Rs 7 lakh.”
Shweta jain, a certified financial planner and Founder of Investography, said that this move was much needed. “Now, the maximum amount has increased from Rs 6 lakh to Rs 7 lakh,” she said adding this move will be beneficial for people who are under insured or do not have insurance at all, as this would give their families protection and support when they need the most.
Who Pays For Your Insurance?
All organisations covered under the EPF Act of 1952 get automatically enrolled for EDLI. Both employees, as well as employers, contribute to all three schemes run by EPFO. The employer and the government contribute to EDLI. The contribution made by the employer to EDLI is 0.5 per cent. The employee does not need to contribute to the deposit-linked insurance scheme. So, under EDLI, the claim amount is 30 times the average monthly salary in the past 12 months subject to a maximum of Rs 7 lakh.