EPFO’s life insurance cover to stay for 3 yrs after loss of job
The next time you’re out of a job, don’t worry about your life insurance. The government will cover it as long as you get employed in the next three years.
The state-run Employees’ Provident Fund Organisation (EPFO) plans to provide life insurance to people out of a job for up to three years, charging a nominal premium amount.
The move will help thousands of organised sector workers who lose their safety net the moment they’re unemployed, a major handicap in a country where only 3% people have life insurance.
The proposal comes days after the government was forced to scrap proposed changes to provident fund withdrawals following violent protests by thousands of garment workers in Bengaluru.
The decision to provide insurance cover is expected to re-build the image of the government that was accused to anti-poor by the Opposition after proposed changes barred workers from withdrawing their entire retirement fund if unemployed for at least two months.
Every month, salaried individuals contribute 12% of their pay to the EPF account. The employer puts in an identical sum, 0.5% of which is earmarked for the Employee’s Deposit Linked Insurance (EDLI) Scheme.
Under this initiative, each employee is guaranteed an insurance ranging between Rs5,000 and `6 lakh, depending upon the salary and duration of service irrespective of the actual balance in the provident fund.