The problem in today’s world is that everyone puts their entire efforts in earning money. Both the partners work hard to satisfy family needs from the financial perspective. In doing so we are compromising on various aspects like health, parenting, reading books, spend time on self etc.
We are so stressed out that we do not think of anything else. We have huge monthly saving to invest but we don’t plan and we are not sure where to invest. Most of the time the money lies ideal in saving accounts or they are made to invest in real estate by by non professionals. Or some bank agent sees their bank balance and manages to sell them a ULIP or some other high commission product in the name of their child's future. By the time we realise that we made a bad investment, we would have already lost a lot of money in these products.
To be a winner, you have to put efforts into something!!
We all are so busy doing so many things that regular financial planning takes a back seat. Further, lack of knowledge and enough information delays it even more.
People don’t realise the importance of financial discipline. You make money, but do not put efforts to make the money you have made to make more money for you.
If you channelize your savings properly you can easily achieve your dreams. With financial planning, you can do goal-based planning and ensure that you live the quality of life you always desired, ensure your children's future, plan and retire early comfortably, spend time with your kids etc.
Financial discipline also includes proper tax planning and timely tax filling. There are various benefits available for an individual under the income tax Act which are considered while preparing a financial plan. However, many people just invest for the purpose of tax savings and nothing more or less than that. This is not enough, you must get more discplined, define your goals, understand your savings, reduce your expenses and invest accordingly.
The main purpose of this article is to encourage individuals to inculcate financial discipline. In our other articles, we have discussed about how to convert a financial discipline into gains by investing properly.
We have discussed the basic contributions of EPF and how the money is invested, contributed and received by the employees. There is a component called EDLIS (Employee Deposit Insurance Scheme) of EPF contributions. We have discussed the features of EDLIS as under:
The EDLI scheme was launched in 1976 and applies to all employers who provide the Employee’s Provident Fund (EPF) provisions to their employees. The point of the scheme is to provide life insurance coverage to all their employees.
The EDLI Scheme is clubbed and linked to the EPF Scheme and EPS scheme. All employees who subscribe to the EPF scheme are automatically enrolled in the EDLI scheme.
All of the employees’ contribution goes toward the EPF scheme. The employees do not contribute to EDLIS. Contributions are made by the employer.
EDLI contribution by Employer: 0.50% (subject to a maximum of INR.15,000)
Features and benefits of the EDLI scheme:
The Claim amount under the EDLI Scheme is 30 times the salary. Salary is calculated as (D.A. + Basic Salary).
A bonus of INR 1,50,000 is also payable along with the claim amount.
The quantum of coverage is directly linked to the salary of the employee.
The premium payable is similar for all employees.
Payments are made by the employer to the Provident Fund Authorities.
Under Section 17 (2A) of the Act, the employer can opt-out of contributing to this scheme if the employer has already opted for a better insurance policy for its employees under a different scheme.
In lieu of EDLI, the employer can also opt for schemes like the LIC Group Insurance Scheme.
EDLI claim procedure:
The amount payable can be claimed by the nominee of the employee.
In case there has been no nominee named, the surviving family members of the deceased can claim the amount.
Under the claims to be made by surviving family members, claims cannot be made by the oldest son or married daughters whose husbands are still alive.
In case there is no nominee or eligible surviving family member, the claim can be made by the legal heir.
In case the nominee, surviving family member, or legal heir is a minor – the claim can be made by the legal guardian.
While filling out the claim, it should be kept in mind that: The EDLI Claims are only admissible if the deceased person was actively employed at the time of death. The application for the claim must be attested by the employer.
In case the employer is not available to attest the claim application, the attestation must be done with the official seal of either:
Gazetted Officer.
President of Village Panchayat.
Chairman / Secretary / Member of Municipal or District Local Board.
Postmaster or Sub Postmaster.
MP or MLA.
Member of CBT or Regional Committee of EPF.
Bank Manager (of the bank in which the account was maintained).
In order to claim the Provident Fund dues and Pension /
A canceled cheque should be attached with the claim forms.
Documents required for a claim under the EDLI scheme
Death certificate: of the EDLI member.
Guardianship Certificate: If the claim is being made on behalf of a minor family member, nominee, or legal heir, the legal guardian must also submit a guardianship certificate.
Succession certificate: If the claim is being made by a legal heir of the deceased.
Canceled cheque: of the bank account of the claimant in which claim funds are to be deposited.
Example
Mr. Nath was employed and was actively contributing to the EPF, EPS, and EDLI schemes. He drew a monthly salary of Rs.15,000. Upon his death, his nominee claimed the EDLI insurance benefit which was equal to (30 x Rs.15,000) + (Rs.1,50,000) = Rs.6,00,000.
WCafe Financial Services Pvt Ltd (formerly known as Wealth Cafe Financial Services Pvt Ltd) is a AMFI registered ARN holder with ARN-78274.
WCafe Financial Services Pvt Ltd (formerly known as Wealth Cafe Financial Services Pvt Ltd) is a SEBI registered Authorised Person (sub broker) of Sharekhan Limited with NSE Regn AP2069583763 and BSE Regn AP01074801170742.
