Employees Deposit Linked Insurance (EDLI)

EPFO introduced the EDLI scheme in 1976 with the aim of providing insurance benefits to its members. The primary objective of the scheme is to offer financial support to the member's family in the event of their sudden demise. Unlike other insurance schemes, there are no exclusions under the EDLI scheme, and all members are eligible for coverage. The amount of insurance coverage provided under the scheme is based on the member's salary in the 12 months preceding their death.

The coverage is derived based on monthly basic salary and average PF balance of preceding 12 months. It is calculated as 35 times the basic monthly salary (capped at Rs.15000).

The EDLI scheme is a crucial financial safety net for the dependents of the members in the event of their sudden demise. It is an economical method for employers to provide life insurance coverage to their workers.

The EDLI scheme is a significant social security initiative that offers life insurance coverage to EPFO members. It provides financial protection to the families of deceased members and is a beneficial perk for organized sector employees.

The Employees' Deposit Linked Insurance Scheme (EDLI) is a group insurance program offered by the Employees' Provident Fund Organisation (EPFO) in India. All members of the EPFO, including organized sector employees who contribute to the Employees' Provident Fund (EPF), receive life insurance coverage through this scheme.

The primary goal of the EDLI scheme is to provide financial security to the family of the deceased member in the event of an untimely death. Employers with more than 10 employees are required to participate in the program, and the employer pays the premium. The coverage provided by the EDLI scheme is linked to the member's EPF balance. The sum assured under the scheme is calculated by multiplying 35 with the average monthly basic salary (with capping of 15000/month) and average of PF balance of last 12 months (with capping of 1.75 Lakhs),12 months preceding their death. The minimum sum assured is Rs. 2.5 lakhs, and the maximum is Rs. 7 lakhs.

• Coverage : The EDLI scheme provides life insurance coverage to all EPFO members, including organized sector employees who contribute to the Employees' Provident Fund (EPF).


• Mandatory for Employers : Employers with more than 10 employees are required to participate in the scheme, and the premium is paid by the employer.


• EPF Balance : The coverage provided by the EDLI scheme is linked to the EPF balance of the member. This means that the sum assured under the scheme increases as the member's EPF balance grows.


• Cost-effective : The EDLI scheme is a cost-effective way for employers to provide life insurance coverage to their employees, as the premium paid is relatively low compared to the coverage provided.

The EDLI scheme features include;

• Provides life insurance coverage to all members of EPFO, including those working in the organized sector.
• Sum assured is calculated as 35 times the monthly basic salary and average of last 12 months’ balance in the EPF account of the member during the 12 months preceding their death.
• The minimum sum assured under the scheme is Rs. 2.5 lakhs and the maximum are Rs. 7 lakhs.
• The scheme is mandatory for all employers with more than 10 employees.
• Premium is paid by the employer.
• The coverage under the scheme is linked to the EPF balance of the member
• The scheme provides financial security to the family of the deceased member in case of their untimely demise.
• The EDLI scheme is a cost-effective way for employers to provide life insurance coverage to their employees.

The EDLI scheme's contribution is mandatory for all employers with more than 10 employees and is a small percentage of the employee's basic salary. The contribution made by the employer is deposited into the EDLI fund, which provides life insurance coverage to all EPFO members, including organized sector employees who contribute to the Employees' Provident Fund (EPF).

The sum assured under the scheme is linked to the EPF balance of the member, and the coverage provided by the scheme is calculated as 35 times the average monthly balance in the EPF account of the member during the 12 months preceding their death.

The minimum sum assured under the scheme is Rs. 2.5 lakhs, and the maximum is Rs. 7 lakhs. Overall, the EDLI scheme's contribution is a valuable social security initiative that provides financial protection to the dependents of the members in case of their sudden demise.

The EPFO (Employees' Provident Fund Organisation) determines the amount of coverage for EDLI based on the monthly salary of the employee. Here is a breakdown of how the calculation is done:

• The employee's monthly salary is the primary factor considered for EDLI calculation. This includes the basic wages and dearness allowance paid to the employee.


• The maximum amount of coverage under the EDLI scheme is Rs. 7 lakhs, even if the employee's monthly salary is higher than this cap.


• The EDLI formula takes into account the monthly salary, the upper cap limit, and the rate of insurance coverage determined by the EPFO.


• The formula for EDLI calculation is: EDLI = Monthly salary (up to the cap limit) x 35. For instance, if an employee's monthly salary is Rs. 20,000, the EDLI coverage will be calculated as Rs. 20,000 x 35 = Rs. 7 lakhs, with maximum capping at Rs. 5.25 lacs.


• The rate of insurance coverage is determined by the EPFO, and it currently stands at 0.5% of the monthly basic salary. This means that if an employee's monthly salary is Rs. 20,000, maximum rate of insurance coverage will be Rs. 75/month only, even if at 0.5% rate it comes out to be Rs. 100/month.


• The employer also contributes to the EDLI scheme. They contribute 0.5% of the employee's monthly salary up to a maximum of Rs. 15,000.

In order to receive the benefits of the EDLI scheme, the employer is required to submit the EDLI claim form to the EPFO. The EDLI claim form is a document that must be completed by the nominee or legal heir of the deceased employee. The form asks for various details such as the employee's name, EPF account number, date of birth, date of death, cause of death, and information about the nominee/legal heir. Additionally, the form requires the bank account details of the nominee/legal heir, where the EDLI benefits will be deposited.

To complete the EDLI claim form, several documents must be provided, including the death certificate of the employee, the nominee/legal heir's identity proof and address proof, and a copy of the nominee/legal heir's bank passbook. These documents must be attested by a gazetted officer or the employer.

After the EDLI claim form and the necessary documents have been submitted to the EPFO, the claim will be processed. The EPFO will verify the information provided in the form and the documents submitted. Following this, the EDLI benefit will be deposited into the nominee/legal heir's bank account.

The EDLI claim form is a crucial document that enables the nominee/legal heir of a deceased employee to receive the benefits of the EDLI scheme. The form must be completed accurately and accompanied by the required documents to ensure that the EPFO processes the claim promptly.

If you are a nominee or legal heir of a deceased employee who wants to claim benefits under the EDLI scheme, follow these steps:

• Obtain the EDLI claim form : The first step is to download the EDLI claim form from the EPFO website or collect it from the EPFO office.


• Fill out the EDLI claim form : Provide all the necessary details in the form, such as the deceased employee's name, UAN account number, date of birth, date of death, cause of death, and your personal details.


• Submit the required documents : Along with the filled-out form, submit the required documents, such as the employee's death certificate, your identity proof and address proof, and a copy of your bank passbook. These documents must be attested by a gazetted officer or the employer.


• Submit the EDLI claim form : Submit the completed EDLI claim form and the required documents to the EPFO office where the employee's EPF account is maintained.


• Wait for the claim to be processed : After submitting the claim form and documents, the EPFO will verify the details provided and process the claim. If the claim is approved, the EDLI benefit will be deposited into your bank account.

An employee can be eligible for the EDLI Scheme if:

• The employee must have been a member of the EPF scheme.
• The employer must have an EPF account and have enrolled their employees in the EPF scheme.
• The employee and employer must have contributed to the EDLI scheme.
• The worker's EPF account must have been active at the time of their death.
• The death of the employee should have occurred while they were in service.

To make a claim under the EDLI (Employee's Deposit Linked Insurance) Scheme, certain documents need to be submitted to the EPFO (Employees' Provident Fund Organization) by the nominee or legal heir of the deceased employee. These documents are crucial to establish the eligibility of the claim and the authenticity of the claimant. The following are some of the necessary documents required for a claim under the EDLI Scheme:

• Death Certificate of the Employee : A certified copy of the employee's death certificate issued by the appropriate authority to prove the fact of the employee's death.
• Identity Proof and Address Proof of the Nominee/Legal Heir : To verify the identity and relationship of the nominee/legal heir with the deceased employee, documents such as Aadhaar Card, Voter ID Card, PAN Card, Passport, Driving License, or Bank Statement are acceptable for identity proof and address proof.
• Nominee/Legal Heir's Bank Passbook : The bank passbook should be in the name of the nominee/legal heir to deposit the EDLI benefit once the claim is approved.
• Claim Form : The nominee/legal heir must accurately and completely fill out the EDLI claim form, which requires details such as the deceased employee's name, UAN number, date of birth, date of death, cause of death, and the details of the nominee/legal heir.
• Employer Certificate : The employer needs to certify that the employee was a member of the EPF scheme and had contributed to the EDLI scheme.

All of the above documents need to be attested by a gazetted officer or the employer to be considered valid. Once these documents are submitted to the EPFO along with the claim form, the processing of the claim begins, and if approved, the EDLI benefit is deposited into the nominee/legal heir's bank account.