The Employees’ Deposit Linked Insurance (EDLI) is a government scheme that was created to provide life insurance support to private company employees who are members of the Employees’ Provident Fund (EPF).
In the case of the EPF member’s death, the individual’s nominee or legal heir is paid as the EPF benefit. The maximum benefit provided under the EDLI scheme is ₹7 lakh.
Read on to know the eligibility criteria for EDLI, key features and benefits, and how to claim the EDLI scheme.
EDLI Eligibility Criteria
The eligibility criteria to access the benefits under the EDLI scheme are as follows:
- The applicant must be employed with a stable income.
- The applicant must earn at least a basic salary of up to ₹15,000.
- The applicant must be working in a company with over 20 employees.
Note: that when the employee’s salary is over ₹15,000, the maximum benefit offered by the EDLI scheme is ₹7 lakh.
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Documents Required for EDLI Scheme
Below are the various documents required to apply for the EDLI scheme:
- Death certificate of the insured person.
- Completed Form 5 IF.
- A succession certificate is required if the legal heir makes the claim.
- Copy of canceled cheque for the bank account where the payment is credited.
- A guardian certificate is required if the claim is raised on behalf of a minor by anyone other than the natural guardian.
EDLI Scheme Benefits
There are various benefits offered by the EDLI scheme to EPF members:
- No Employee Contribution: The scheme is entirely funded by employer contributions, and therefore, employees do not need to contribute.
- Life Insurance Coverage: Provides financial assistance to the family of the employee who was an active EPF member at the time of death.
- Bulk Payment: The nominee or legal heir of the employee is provided a lump-sum amount in the case of death. The amount goes up to ₹7 lakh and is based on the employee’s salary.
- Automatic Enrollment: All EPF members are automatically enrolled in the EDLI scheme without requiring any additional registration or exclusions.
- Validity: The benefits of the EDLI scheme are still valid even if the employee’s death occurs anywhere across the world.
Also Read: Loan Against Insurance Policy
EDLI Features
Below are the various features of the EDLI scheme:
- No Employee Contributions: The EDLI scheme is funded entirely by the employers, and therefore, the employees need not make any contributions.
- Accessibility: All members with an EPF account will have access to the benefits offered by the EDLI scheme.
- Eligibility: All employees with a basic salary of ₹15,000 are eligible for the EDLI scheme. In case of a higher salary, the maximum benefit paid is ₹7 lakh.
- Bonus: In addition to the insurance coverage, a bonus of ₹2.5 lakh is provided under the EDLI scheme.
- Validity: Even in the case of the employee’s death outside India, the scheme will pay the employee’s family the respective amount.
EDLI Contribution by Employer & Employee
As per Section 17(2A) of the Employees Provident Fund and Miscellaneous Provisions Act 1952, employers have the option to stop providing funds to the EDLI scheme. That is only if they decide to implement another life insurance policy with more benefits.
The table below shows an overview of the EDLI contributions made by the employer and employee.
| Scheme | Employee Contribution | Employer Contribution |
|---|---|---|
| EDLI | Nil | 0.5% of basic salary + dearness allowance, up to a maximum of ₹75 per month |
| EPF | 12% of Basic Salary + Dearness Allowance | 3.67% of Basic Salary + Dearness Allowance |
EDLI Calculation
For employees under the EDLI scheme, the benefit is calculated as follows:
Average Monthly Salary during the last 12 months x 30 days
Basic salary is capped at ₹15,000. Additional bonus includes ₹2.5 lakh (30 times the average salary).
So, 30 × Average Monthly Salary (capped at ₹15,000)
Additional Benefit (Bonus) = ₹2.5 lakh
Total EDLI Benefit = Base Benefit + ₹2.5 lakh
For example:
If an employee’s average monthly salary is ₹15,000:
- Base Benefit = ₹15,000 × 30 = ₹4,50,000
- Additional Benefit = ₹2,50,000
- Total EDLI Payout = ₹4,50,000 + ₹2,50,000 = ₹7,00,000
Hence, the nominee will receive the maximum payout of ₹7 lakh.
You can also use the EDLI calculator on the official website of EPFO India.
Steps to Claim EDLI Scheme
Here is the step by step process on how you can claim the benefits under the EDLI scheme after the employee’s death.
- Obtain Form 5 IF from the official website of EPFO or the employer and complete it.
- Submit the necessary documents such as a death certificate, bank details, a canceled cheque, and a succession certificate.
- The employer must verify and sign the form. In the absence of, the form must be attested by a Gazetted Officer.
- Submit the form to the Regional EPF Commissioner’s Office.
You can check the status of your claim on the EPFO website as well. The EPF commissioner is required to settle the claim within 30 days of receiving it.
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