Employees Deposit Linked Insurance

Employees Deposit Linked Insurance

All employers to whom the Employers’ Provident Fund and Miscellaneous Provision Act, 1952 applies have a statutory liability to subscribe to Employee’s Deposit Linked Insurance Scheme, 1976 to provide for the benefit of Life Insurance to all their employees.

As per the recent notification published by the Ministry of Labour and Employment Dated 8th January, 2011, the insurance benefit is equal to the average monthly wages (subject to a maximum of Rs.6500) during the 12 months preceding the month in which the insured died multiplied by 20 times or the amount of benefit under sub-paragraph (1) as mentioned in earlier notification dated 18th June 2010, whichever is higher.

The contribution @ 0.50% of each employee’s salary is payable by the employer to the Provident Authorities. In addition, an administration and inspection charge of 0.01% is also payable to RPFC.

However under Sec 17(2A) of the Act, the employer may be exempted from contribution to this scheme if he/she has provided for better insurance benefits through alternative schemes.

The Life Insurance Companies offer flexibility to the client to choose the sum assured based on the norms and industry standard, as applicable, subject to the limits allowed in the product feature. However, the RLIC offers flexibility to the client to choose the sum assured based on the norms and industry standard, as applicable, subject to the limits allowed in the product feature.

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