Many salaried employees in India associate their Provident Fund (PF) account only with retirement savings. However, few are aware that along with the PF contribution, they are also covered under a free life insurance benefit provided by the Employees’ Provident Fund Organisation (EPFO).
Under the Employees’ Deposit Linked Insurance Scheme (EDLI), eligible PF account holders receive life insurance coverage of up to ₹7 lakh — without paying any additional premium. This lesser-known benefit can offer crucial financial protection to families in case of an employee’s untimely death.
The EDLI Scheme is a social security initiative linked to EPF accounts. It ensures that if an employee passes away during active service, their nominee or legal heir receives a lump sum insurance amount.
The most important feature of this scheme is that:
The employee does not pay any separate premium.
The entire contribution toward the insurance cover is made by the employer.
Coverage is automatic for eligible EPF members.
This means that as long as your employer is contributing to your EPF account, you are automatically covered under EDLI.
The insurance payout under the EDLI scheme is calculated based on the employee’s average monthly salary (basic + dearness allowance) over the last 12 months of service.
Minimum Insurance Amount: ₹2.5 lakh
Maximum Insurance Amount: ₹7 lakh
Premium Paid By: Employer
Employee Contribution: ₹0
The final insurance amount is determined using a formula prescribed by EPFO, but it cannot exceed ₹7 lakh under current rules.
The EDLI benefit applies to:
Employees working in the organized sector
Individuals whose salary includes PF deductions
Active EPF members at the time of death
If an EPF member dies during employment, their nominee registered in the EPF account can claim the insurance amount. If no nominee is registered, the legal heirs can apply for the benefit.
This makes updating nomination details extremely important for every PF account holder.
To claim the EDLI insurance benefit, the nominee must follow a specific procedure.
Fill Form 5 IF
The nominee must complete Form 5 IF, which is specifically designed for EDLI claims.
Submit Through Employer
The form is submitted to the employer, who forwards it to the EPFO regional office.
Attach Required Documents
Death certificate of the employee
Identity proof of the nominee
Bank account details of the nominee
Legal heir certificate (if required)
Verification and Transfer
Once EPFO verifies the documents, the approved insurance amount is directly credited to the nominee’s bank account.
The processing time may vary depending on document verification and regional office procedures.
In India, millions of employees consider PF only as a long-term retirement corpus. However, the EDLI scheme acts as an additional financial safety net.
Provides financial stability to families during sudden loss
No premium burden on employees
Automatic coverage with EPF membership
Quick and structured claim process
In situations of unexpected demise, this insurance support can help families manage immediate expenses and maintain financial stability.
If you are contributing to EPF:
Ensure your nominee details are updated in your EPF account.
Inform your family members about EDLI coverage.
Keep personal records and employment documents organized.
Awareness about this hidden benefit can make a significant difference during difficult times.
