EDLI Scheme: Did you know all private sector employees are covered with a free insurance payout of up to 7 lakh for their dependents? Check details

PuneNow, Sept 01, 2023: In a rapidly evolving economic landscape fraught with uncertainties, securing the financial future of one’s family is paramount. Private-sector employees often find themselves devoid of the social safety nets that public sector employees enjoy. However, the government had introduced a lifeline in the form of the Employees Deposit Linked Insurance Scheme (EDLI) in 1976, aiming to provide financial stability to the families of deceased employees.

What is the Employees Deposit Linked Insurance Scheme (EDLI)?

EDLI is a life insurance cover offered by the Employees Provident Fund Organisation (EPFO) for salaried employees in the private sector who are EPFO members. In the tragic event of an employee’s death during their period of service, a lump-sum payment is awarded to the registered nominee.

Who is Covered?

Organisations registered under the Employees Provident Fund and Miscellaneous Provisions Act, 1952, are required to provide EDLI benefits to their employees. The scheme collaborates with the Employees’ Provident Fund (EPF) and Employees’ Pension Scheme (EPS) to offer a comprehensive package.

Benefits and Features

1. Coverage Limit: Employees with a basic salary under Rs. 15,000 per month are covered. The maximum benefit is capped at Rs. 7 lakh.
2. No Employee Contribution: Employees do not need to contribute to EDLI, only to EPF.
3. Bonus: A bonus of up to Rs. 2.5 lakh is available.
4. Global Protection: The coverage is worldwide and around the clock.
5. Employer Contribution: Employers must contribute 0.5% of the basic salary, capped at Rs. 75 per employee per month.
6. Payout Calculation: The lump-sum payout to the nominee or legal heir is calculated based on the average monthly salary for the last 12 months, up to a maximum of Rs. 15,000, multiplied by 30, plus a bonus amount of Rs. 2,50,000.

Eligibility Criteria

• The employee’s basic salary should be up to Rs. 15,000.
• The employer should have more than 20 employees.

How to Claim Benefits

1. Complete EDLI Form 5 IF.
2. Provide a Death Certificate and Succession Certificate, if needed.
3. Submit documents to the regional EPF Commissioner’s Office for processing.

Frequently Asked Questions

• Is there a minimum service period? No.
• Can an employer opt out? Yes, if they provide a better insurance scheme.
• Can I check my EDLI coverage online? You can check it in your EPF passbook.
• Are there exceptions? Yes, benefits may not be provided in cases like death due to intoxication or hazardous activities.

In Summary

EDLI serves as a financial safety net for families of deceased private-sector employees, and it is a crucial part of India’s employment benefits landscape. Its scope, benefits, and simplicity make it an essential tool for financial security.