EDLI – Employees Deposit Linked Insurance Scheme
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Introduction

The Government of India launched the Employees Deposit Linked Insurance Scheme (EDLI) in 1976 to provide financial protection to private-sector employees. This scheme ensures that employees’ families receive compensation in case of premature death. The Employees Provident Fund Organisation (EPFO) administers the scheme and offers term life insurance coverage to all EPF members.

How Does the EDLI Scheme Work?

Organizations eligible for the Employee Provident Fund (EPF) automatically qualify for EDLI coverage. Contributions to the Employees Deposit Linked Insurance Scheme are made monthly along with the EPF contributions. The breakdown of EDLI charges in PF is as follows:

  • 12% of the employee’s basic salary + Dearness Allowance (DA) goes towards the EPF Account.
  • Employer Contribution (12%) is divided as follows:
    • 3.67% to the EPF Account.
    • 8.33% (capped at Rs. 1,250) to the Employees’ Pension Scheme (EPS).
    • 0.50% (capped at Rs. 75) to the EDLI Account.

Employers can also opt for a group life insurance policy, provided its coverage is equal to or higher than the Employees Deposit Linked Insurance Scheme. If no group insurance is chosen, the employer can increase contributions up to Rs. 15,000 per month.

Features of the EDLI Scheme

  • Employer-funded: Employees do not contribute towards EDLI; only employers make payments.
  • Automatic Coverage: All EPF subscribers are automatically covered under EDLI.
  • Global Coverage: Benefits are applicable regardless of location (within or outside India).
  • Financial Security: Offers lump sum compensation in case of employee’s death.

You may also want to know National Rural Employment Guarantee Act

EDLI Benefits – How Much Is Paid?

The Employees Deposit Linked Insurance Scheme payout is calculated using the formula:

30 × Average Monthly Salary (Last 12 Months) + Bonus

  • Maximum Salary Considered: Rs. 15,000
  • Bonus Component: Rs. 2.5 Lakhs (since September 2020)

Example Calculation:

Monthly SalaryEDLI CalculationTotal Payout
Rs. 15,000(30 × 15,000) + 2,50,000Rs. 7 Lakhs
Rs. 10,000(30 × 10,000) + 2,50,000Rs. 5.5 Lakhs

How to Claim Employees Deposit Linked Insurance Scheme Benefits?

If an employee dies while actively enrolled in the Employees Deposit Linked Insurance Scheme, their nominee or legal heir can claim the benefit by following these steps:

  1. Fill and submit Form 5 IF.
  2. Get the employer’s certification (if unavailable, attestation by authorized officials is required):
    • MLA/MP
    • Bank Manager
    • Magistrate
    • Gazetted Officer
    • Postmaster
    • Member of EPF Regional Committee
  3. Submit Form 20 (for EPF withdrawal) & Form 10C/D (for pension benefits).
  4. Send documents to the EPF Commissioner’s Office.
  5. Claim Settlement: Verified claims are processed within 30 days.
  6. Delayed Claims: If payment is delayed, interest at 12% per annum is paid for each delayed day.

EDLI Eligibility Criteria

  • Applicable to: Organizations with 20+ employees.
  • Salary Cap: Employees earning up to Rs. 15,000 per month qualify for the maximum benefit.
  • No Exclusions: Every employee under EPF is automatically covered.

You may also want to know Pradhan Mantri Shram Yogi Maandhan

Documents Required for EDLI Claim

To claim EDLI benefits, the nominee/legal heir must submit:

  • Death certificate of the employee.
  • Succession certificate (if the legal heir is claiming).
  • Guardianship certificate (if a minor’s guardian is claiming).
  • Canceled cheque of the nominee’s bank account for fund transfer.

Advantages of Employees Deposit Linked Insurance Scheme

  • Free life insurance coverage for all eligible employees.
  • Minimal employer contribution, ensuring a financial cushion for employees’ families.
  • No exclusions, covering all deaths, regardless of location.
  • No premium payments by employees.
  • Acts as financial security for the employee’s dependents.

Conclusion

The Employees Deposit Linked Insurance Scheme (EDLI) provides essential social security protection for private-sector employees. With free insurance coverage, lump sum payouts, and global validity, it ensures financial stability for an employee’s family in case of unexpected death. If you are an EPF subscriber, make sure your nomination details are up-to-date to secure maximum benefits for your dependents.

Frequently Asked Questions

EDLI stands for Employees Deposit Linked Insurance Scheme.

All employees covered under EPF automatically qualify for EDLI insurance coverage.

The maximum payout under EDLI is Rs. 7 Lakhs.

No, only employers contribute to the EDLI scheme.

No, employees cannot opt out of EDLI, as it is linked to EPF membership.

Claims are processed within 30 days. If delayed, 12% interest is paid.

Yes, EDLI benefits are applicable globally, regardless of location.

If the employer provides group life insurance with benefits equal to or greater than EDLI, the employer may opt out of EDLI.

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