EDLI Scheme: Ensuring Insurance for Private Sector Employees
Why in the news?
The EDLI scheme has gained attention as the government recently increased the maximum assured benefit to Rs 7 lakh, enhancing social security for private sector employees, especially during uncertain times of employment and economic fluctuations.
Overview of EDLI Scheme:
- The Employees Deposit Linked Insurance (EDLI) Scheme was launched in 1976 by the government.
- It offers term life insurance to employees in the private sector.
- Managed by the Employees Provident Fund Organisation (EPFO), it covers all organisations registered under the Employees Provident Fund (EPF) and Miscellaneous Provisions Act, 1952.
Benefits and Features:
- Maximum benefit: Rs 7 lakh to the nominee if an EPF member dies while in service.
- Minimum benefit: Rs 2.5 lakh if the employee was employed for at least 12 months.
- Insurance cover is free for employees; employers contribute 0.5% of monthly wages (up to Rs 15,000).
- Automatically enrols EPF members, and the payout goes directly to the nominee’s bank account.
Key points :EPFO
- EPFO is a statutory body under the Ministry of Labour and Employment.
- It administers the Provident Fund, Pension, and Insurance schemes for employees in the organised sector.
- Governed by the Central Board of Trustees, which includes representatives from the government, employers, and employees.
Employees’ Provident Fund (EPF) Scheme:
- EPF is the main scheme under the 1952 Act.
- Both employee and employer contribute 12% of the employee’s basic salary and dearness allowance.
- Mandatory for employees with a monthly salary of up to Rs. 15,000.
Sources Referred:
PIB, The Hindu, Indian Express,Hindustan Times
Watch on Youtube : EDLI Scheme 1976: Life Insurance for Private Sector Employees Explained