Strict order from Delhi regarding EPFO insurance claim of 7 lakh rupees for deceased employees families

EPFO Insurance: One of the most significant social security benefits available under the Employees’ Provident Fund (EPF) is the Employees’ Deposit Linked Insurance (EDLI). If an EPF member passes away while in service, their family is entitled to a lump sum insurance amount. However, complaints have surfaced that certain regional PF offices are denying this benefit to the families of deceased employees or paying less than the due amount using various excuses. Taking note of these irregularities, the Employees’ Provident Fund Organization (EPFO) has stepped in with strict directives to prevent such harassment.

Irregularities in Insurance Claims by Regional Offices

According to the EPFO’s own observations, a section of regional staff is creating unnecessary hurdles in settling insurance claims for the families of deceased members. Specifically, they are treating minor gaps in service or holidays between job switches as “service breaks” to reject or reduce insurance claims. With a mounting pile of complaints regarding this issue, the Central Board of Trustees has taken a firm stance.

New Rules and Benefits of PF Insurance

In the last meeting of the Central Board of Trustees, three major decisions were taken to ensure the financial security of a deceased employee’s family:

• Insurance for Service Less Than 1 Year: Previously, if an employee worked for less than a year, their family was not eligible for insurance. Under the new rule, even if a person works in an organization for less than a year and passes away, their family will receive a minimum insurance amount of ₹50,000.
• Coverage After Leaving the Job: If no contribution is made to a person’s PF account for up to 6 months, and the member passes away within those 6 months, their family will still be eligible to receive the insurance money.
• Relaxation in Job Switch Gaps: To avail of the maximum ₹7 lakh and minimum ₹2.5 lakh insurance benefit, continuous service of one year is mandatory. Earlier, if weekends or public holidays fell between leaving one job and joining another, it was treated as a break in service, leading to claim rejection. The new rule states that a gap of up to 2 months between two jobs will still be considered as “continuous service,” ensuring the family receives the full insurance benefit.

Strict Message from Authorities

Despite these clear rules, reports suggest that some regional offices are still denying claims by citing weekends, state holidays, or central government holidays between job changes as breaks in service. To stop this malpractice, the EPFO headquarters in Delhi has issued clear instructions to regional offices. They have been directed not to withhold insurance money due to holidays or minor gaps, ensuring that the families of deceased employees are not deprived of their legitimate dues.