EPF with Life Insurance

Employees can choose to opt for a life insurance cover under the Employees Deposit Linked Insurance. The cost of this scheme will be paid by the employer completely and the employee need not make any contributions for this.
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EPF with Life Insurance!

EPF is mandatory for individuals earning a salary up to Rs.6500. Those earning more than Rs.6500 can contribute to the fund voluntarily. The fund is maintained by EPFO (Employee provident Fund Organisation). Both the employer and the employee contribute to the employee’s fund.

Features of EPF

Listed below are some of the important features of an Employee Provident Fund

  • It is available only to salaried employees
  • A part of the employee’s salary is invested in the EPF account every month
  • Employer’s contribution of 12% of basic salary is totally deposited in provident fund account whereas out of employee’s contribution of 12%, 3.67% is contributed to provident fund & 8.33% is deposited in Pension scheme.
  • Employees also have the option of contributing more than 12% if they intend to
  • The amount invested in an Employee Provident Fund is exempt from tax under Section 80C of the Income Tax Act.
  • In EPF, the amount is paid at the time of retirement or resignation, whichever occurs earlier.
  • The employee can check the amount invested in their EPF account online on the EPF India website with their Universal Account Number(UAN)
  • Partial withdrawals allowed for specific expenses such as house construction, higher education, marriage, illness etc.

Employee’s Deposit Linked Insurance

An employee can avail life insurance cover under Employee’s Deposit Linked Insurance. All the cost related to this scheme will be paid for by the employer and the employee doesn’t have to make any contributions. The scheme used to offer a life cover up to Rs.60,000 before and as a result of low cover many employees opted out of the scheme. But EPFO later allowed Edelweiss Tokio Life-Group Life Protection which offered cover up to double the previous amount. Edelweiss Tokio Life-Group Life Protection offers a minimum sum assured of Rs.1,32,000 under this scheme. Every member of Employee Provident Fund Organisation is eligible for this scheme. The members don’t have to worry about claim settlement as the employer will be held responsible in case of failure of payment in case of death of the member.

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