EPFO insurance: Job history gap of up to 60 days won't cut Rs 50,000 cover

New rules for Employees' Deposit Linked Insurance ensure that short employment gaps and public holidays no longer disqualify subscribers from essential benefits , providing greater financial security

EPFO, the retirement fund manager, has said weekends, holidays and gaps of up to 60 days between jobs, if the members have worked in multiple EPF-covered enterprises, will no longer be treated as a break in service while deciding eligibility for benefits under the Employees’ Deposit Linked Insurance (EDLI) scheme.

 

The announcement addresses the issue of death claims being either rejected or paid at a lower amount due to breaks in a subscriber’s employment history, according to a circular dated December 17 by the Employees’ Provident Fund Organisation.

 

Why claims were rejected

The EPFO noted that certain EDLI claims were denied because authorities treated weekends or holidays between two jobs as a break in service. In many cases, this led to dependents losing insurance benefits despite the employee being in active employment at the time of death.

 

The circular cited as example an employee who had resigned on a Friday and joined a new organisation on Monday. Although the individual had completed more than 12 months of service overall, the weekend was counted as a service break, making the family ineligible for EDLI benefits.

 

What has changed now

To remove such anomalies, the EPFO has clarified that certain gaps will be treated as part of continuous service. According to the circular:

 

Saturdays, Sundays or declared weekly offs between two jobs will not be treated as a break

 

National, gazetted, state and restricted holidays will also be ignored

 

This applies when the exit from one employer and joining the next are separated only by such holidays

 

Job changes with gaps of up to 60 days will now be considered continuous service, if the members have worked in multiple EPF-covered enterprises 

 

In effect, short and unavoidable breaks will no longer deprive families of insurance benefits.

 

EDLI payout raised

The EPFO has also enhanced the minimum EDLI payout to Rs 50,000 for dependents or legal heirs. This benefit will be available even if the member had not completed 12 months of continuous service.

 

Importantly, the minimum payout will apply even if the employee’s average provident fund balance was below Rs 50,000.

 

Who is eligible

The revised rules state that the minimum EDLI benefit will be paid if the employee’s death occurs within six months of the last PF contribution, provided the member was still on the employer’s rolls.

 

For salaried employees and their families, the clarification reduces the risk of benefit denial due to technicalities. It also brings greater certainty to insurance cover linked to provident fund membership, especially for workers who switch jobs frequently.