If you’ve ever looked at your salary slip and wondered where your PF money actually goes, here’s something that might surprise you. Hidden inside your EPF account is a free insurance cover of up to ₹7 lakh—and most employees don’t even know it exists.
And here’s the thing… You don’t pay a single rupee for it. Not today, not tomorrow, not ever.
The premium comes entirely from your employer.
Let’s break this down in plain language so you know exactly what you’re entitled to and how your family can claim it if something ever goes wrong.
What Exactly Is This EPFO Free Insurance?
Every employee who contributes to EPF is automatically covered under a scheme called EDLI – Employees’ Deposit Linked Insurance Scheme, 1976.
Think of it as a built-in life insurance that activates the moment you become an EPF member.
Here’s what the cover looks like:
- Minimum payout: ₹2.5 lakh
- Maximum payout: ₹7 lakh
- Who gets it: Your nominee or legal heir
- When it applies: Illness, accident, or natural death
The payout isn’t random. It’s calculated based on your last 12 months’ salary, DA, and PF balance.
What makes EDLI even more reassuring is that it covers employees who worked in more than one company in the past 12 months. So even if you switched jobs recently, your family is still protected.
How Much Do YOU Pay For This? Absolutely Nothing.
One of the biggest myths around EDLI is that it comes with deductions.
It doesn’t.
You pay zero premium.
Your employer pays 0.5% of your basic salary + DA, capped at a salary of ₹15,000.
This means even if your salary is ₹40,000 or ₹80,000, the EDLI calculation still considers only ₹15,000 as the upper limit.
But the best part?
The full insurance amount is paid in a lump sum to your nominee. No EMI, no waiting period.
What If You Never Added a Nominee?
Happens more often than you think.
If you haven’t added a nominee, your EDLI benefits don’t disappear.
The claim will go to:
- Your spouse
- Your unmarried daughters
- Your minor sons
The only condition is that you must have been an active EPF contributor at the time of death.
How EPF Contributions Work (Quick Breakdown)
Just to clear confusion:
- You contribute: 12% (basic + DA)
- Employer contributes: 12%
- 8.33% goes to EPS (pension scheme)
- The remaining goes to EPF
EDLI is a separate benefit that sits quietly behind the scenes, waiting to protect your family if life ever takes an unexpected turn.
How Your Family Can Claim the EPFO Free Insurance
If an EPF member passes away, the nominee or legal heir can file a claim under EDLI. If the nominee is a minor, the guardian can claim on their behalf.
Here’s what they’ll need:
- Death certificate of the employee
- Succession certificate (if no nominee)
- Guardianship certificate (if claimant is for a minor)
- Bank account details of the claimant
To claim the insurance amount, the family must submit Form 5IF along with the employer’s verification.
If the employer isn’t available (company closed, owner unreachable), the form can be verified by:
- A Gazetted Officer
- Magistrate
- Postmaster/Sub-Postmaster
- MP or MLA
- Gram Panchayat President
- Regional Committee Member of CBT/EPF
- Bank Manager
- Municipality Chairman/Secretary
Frequently Asked Questions
1. Is EPFO free insurance automatic?
Yes. The moment your EPF account is active, EDLI coverage activates automatically. No separate form, premium, or activation process is required.
2. How much insurance is paid under EDLI?
Your family can receive between ₹2.5 lakh and ₹7 lakh, depending on your salary and PF balance from the past 12 months.
3. Can the claim be made if the employee didn’t add a nominee?
Yes. In such cases, the legal heir (spouse, children) can file a claim with the relevant certificates. The insurance amount does not lapse.
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