Firms can now ensure higher group insurance of Rs 1.32 lakh for each employee by opting for the Edelweiss Tokio Life-Group Life Protection in lieu of EDLI scheme provided by EPFO.
The Employees' Provident Fund Organisation (EPFO) has tied up with the Edelweiss Tokio Life Insurance to provide this group term insurance plan in lieu of Employees' Deposit Linked Insurance (EDLI) Scheme 1976.Under the existing scheme, an EPFO subscriber gets insurance cover of up to Rs one lakh before superannuation.
According to a circular issued by EPFO to its field offices, all those employers who would opt for the "Edelweiss Tokio Life-Group Life Protection" would be given exemption from the EDLI scheme 1976.
Employers contribute 0.5 per cent of basic pay of an employee as insurance premium to the EDLI scheme every month. The benefit under the scheme is given on the basis of the provident fund balance in the subscriber's account. The subscriber gets the benefit equivalent to the PF account balance if the balance is up to Rs 50,000. But if the balance exceeds Rs 50,000, the benefit is the account balance plus 40 per cent of balance, subject to maximum of Rs one lakh.
The maximum benefit under the scheme was enhanced from Rs 60,000 to Rs one lakh about three years back in 2010.
According to the circular, the reason for this change is because the EPFO found that the benefits under the Edelweiss Tokio Life-Group Life Protection plan are better than those under the EDLI Scheme 1976.