THE EMPLOYEES' DEPOSIT-LINKED INSURANCE SCHEME, 1976

The purpose of the scheme is to provide life insurance benefits to the employees of the establishments covered by the E. P. F. & M. P. Act, 1952. As such the scheme is applicable to the employees of all factories and other establishments covered by the said Act. {Section 6C & Para 1}.

The scheme has come into force from 1-Aug-1976 {Para 1}

Under the scheme the employee is not required to pay any contribution. The employer is, however, required to pay every month contribution at the rate of 0.5 percent of the total wages of the employees covered by the scheme. In addition to the contribution the employer has to pay administrative charges at the rate of 0.1 percent of the total wages of the employees covered by the scheme. {Section 6(C) & Para 7}.

Where the monthly pay of an employee is more than Rs. 6500.00 the contribution payable in respect of him by the employer (and the Central Government) is limited to the amounts payable on monthly pay of Rs. 6500.00 only. {Para 7}.

The benefit provided under the scheme in the nature of life insurance is as follows. On the death of an employee while in service a lumpsum insurance amount is payable to his nominee or family members. The insurance amount is equal to the average balance in the account of the deceased employee in the Provident Fund during a period of 12 months immediately preceding his death. In case the average balance exceeds Rs. 35000.00 subject to a ceiling of Rs. 60000.00. {Para 22}.

The employer is prohibited from recovering the employer's contribution payable by him under the scheme by deducting the same from the wages of employees or in any other manner. {Para 9}

The insurance benefit can be claimed by the nominee or the other claimant by making a written application in Form 5(1F) to the Regional Provident Fund Commissioner through the employer under whom the deceased was last employed. {Para 24}.

The Employees' Provident Funds and Miscellaneous Provisions Act, 1952, permits the Central Government, subject to specified conditions, to exempt any establishment from the operation of all or any or the provisions of the scheme if the employees of such establishments are, without making any separate contribution or payment of premium, in enjoyment of life insurance benefits which are more favourable than the benefits admissible under the scheme. {Section 17(2A)}