Articles 708 views June 11, 2021

Employees Deposit Linked Insurance (EDLI) Scheme

Provided by the Employees’ Provident Fund Organization (EPFO), the Employees Deposit Linked Insurance (EDLI) Scheme is a life insurance cover for salaried individuals working in the private sector. This plan provides a lump sum benefit to the nominee or beneficiary if an insured person dies during the active service period. Under the EDLI scheme, the coverage amount can go up to INR 7 lakh (from April 28, 2021), which was INR 6 lakh earlier.

Employees Deposit Linked Insurance Schemes are available to all those individuals contributing to the provident fund as it works in combination with EPF and Employee Pension Scheme (EPS). With this scheme, the government wants to ensure financial protection to the family of the insured member who dies due to some unfortunate reasons.

Want to know more about the Employees Deposit Linked Insurance (EDLI) Scheme? On this page, we will talk about its different aspects such as features, calculation, required documents, etc. So, let’s start!

Highlights of Employees Deposit Linked Insurance (EDLI) Scheme

We will be discussing key points related to the Employees Deposit Linked Insurance (EDLI) Scheme below. Please check!

  1. The EDLI scheme applies to all the private sector employees with a minimum basic salary under INR 15,000 per month. For individuals with a basic salary of more than INR 15,000, the maximum benefit stands at INR 7 lakh, which used to be INR 6 lakh before April 28, 2021.
  2. Employees of an organization don’t need to contribute to the EDLI scheme. They only need to contribute towards the EPF scheme.
  3. The insurance benefits under the EDLI scheme can be availed by the nominee or beneficiary, who can be dependent family members or legal heirs.
  4. The scheme will also provide the benefit amount of INR 2.5 lakh. In case of death, the nominee will also get this bonus amount under the scheme. Earlier, this benefit amount used to be INR 1.5 lakh.
  5. Any individual, who is working in an organization with more than 20 employees will be automatically eligible under the EDLI scheme, as such organization needs to register for the EPF.
  6. An employer can also choose to offer a different group life insurance scheme to their employees in place of EDLI. However, the benefits and coverage amount should be equal to or more than those offered under EDLI.
  7. An employee will get coverage under the scheme as long as he/she is an active member of the EPF.
  8. According to the EDLI provision, the employer’s contribution stands at 0.5% of the basic salary or a maximum of INR 75 per employee per month. In the case of no other group insurance scheme, the maximum contribution stands at INR 15,000 per month.

How to Calculate EDLI Coverage Amount?

Let’s calculate the coverage amount under the EDLI scheme if an insured person dies during his or her service period.

Suppose the average salary for the last 12 months is INR 15,000, which is also the maximum amount under the EDLI scheme for this calculator even if the basic salary is more than INR 15,000.

Now, the average salary will be multiplied by 35 times.

INR 15,000 x 35 = INR 5.25 lakh (previously, it was used to be 30 times = INR 4.5 lakh)

In addition to the above amount (INR 5.25 lakh), the nominee will also get 50% of the average balance in the PF account of the member during the last 12 months (up to INR 1.75 lakh).

So, the overall benefit amount will be INR 7 lakh (5.25 + 1.75).

How to Get Claim Benefits Under EDLI Scheme?

As we told earlier, the benefits under the EDLI scheme can be claimed by the nominee (specified by the insured person). If there are no nominees, family members or legal heirs can apply for the same. Also, the insured person should be an active member of the EPF at the time of his or her death.

To claim the benefits under this scheme, you will need to follow the steps mentioned below. 

Step 1: After the death of the insured person, complete the EDLI Form 5 IF and submit it. If the claimant is a minor, the guardian will need to fill the form on his/her behalf.

Step 2: This form should be signed and certified by the employer. If there is no employer, the following individuals can attest to the form.

  1. Gazetted Officer
  2. Magistrate
  3. President of Village Panchayat
  4. Chairman/ Secretary/ Member of Municipal or District Local Board
  5. Postmaster or Sub Postmaster
  6. MP or MLA
  7. Member of CBT or Regional Committee of EPF
  8. Manager of the bank in which the account was maintained

Step 3: After successful certification, submit the form to the jurisdictional Regional Provident Fund Commissioner (RPFC) for processing the claim with a copy of the nomination made by the employee.

Step 4: Once all the documents have been submitted and the claim is accepted, the EPFO commissioner would settle the claim within 30 days from the receipt of the claim or 12% per interest will be charged till the date of disbursal.

Documents that You Will Require for EDLI Coverage Payout

The nominee or beneficiary will need the following documents to get the coverage amount under EDLI. Have a look!

  1. Properly completed EPF Form 5 IF
  2. Death Certificate of the insured person
  3. Succession Certificate (If the legal heir files the claim)
  4. Guardianship Certificate (If the claim is filed on behalf of a minor by a person other than the natural guardian)
  5. Copy of canceled cheque for the account in which the payment is to be received

What is the Contribution by the Employer and Employee to EPS, EPF and EDLI?

Both employer and employee have to contribute to the three schemes run by EPFO. To know about the contribution, check the below table.

EPFO SchemeEmployee’s ContributionEmployer’s Contribution
EPF12% of basic salary + Dearness Allowance (DA)3.67% of basic salary + DA
EPSNone8.33% of basic salary + DA (or INR 1,250)
EDLINone0.50% up to INR 75

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