Big EPFO BENEFIT! Don't stick to EPF balance, PF interest only, there is more too; check calculator
The Employees’ Deposit Linked Insurance Scheme (EDLIS) is an insurance cover provided by the Employees’ Provident Fund Organization (EPFO).
EPF or Employees' Provident Fund, which is run by the Employees'Provident Fund Organisation (EPFO), is one of the most important parts of a salaried person's investment portfolio. A salaried person who has an EPF account enjoys a risk-free investment that helps him or her to accumulate a retirement fund in the long-term perspective. Apart from this, up to Rs 1.5 lakh per annum investment in EPF is free from income tax outgo under Section 80C of the Income Tax Act. However, it has been found that people are more interested in knowing their EPF balance and interest rate that the central government announces on a quarterly basis. There are some other benefits for that an employee becomes automatically eligible when his or her EPF account gets opened.
Speaking on the hidden benefits of an EPF account SEBI registered tax and investment expert Jitendra Solanki said, "The Employees’ Deposit Linked Insurance Scheme (EDLIS) is an insurance cover provided by the Employees’ Provident Fund Organization (EPFO). A nominee or legal heir of an active member of EPFO gets a lump sum payment of up to Rs 6 Lakhs in case of the death of the member during the service period. All organizations covered under Employees’ Provident Fund (EPF) and Miscellaneous Provisions Act, 1952 get enrolled for EDLI automatically. This scheme works in combination with EPF and EPS."
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Elaborating upon the calculation involved into the insurance disbursal in case of EPF account holder's death during the service period Solanki said, "To fix the insurance for an EPF account holder if he or she dies during their service period the formula for calculator used is (average of last twelve months x 20) x 1.2. This multiplication of 1.2 is because of the 20 per cent addition bonus being given to the nominee after the death of the EPF account holder's death during the service period."
Apart from this, the EPF account holder automatically becomes eligible for the pension benefit as well. Speaking on the pension benefit Manikaran Singhal, a SEBI registered tax and investment expert said, "All employees covered under the Provident Fund become members of the Pension Scheme. 8.33 per cent of Basic Salary up to Rs 15,000 is contributed to the Pension Scheme from employers' share of contribution. A minimum period of ten years of contributory service is required to be eligible to receive monthly Pension. The full pension is payable on completion of 20 years of contributory service."