EDLI - Employees Deposit Linked Insurance Scheme

EPFO introduced the EDLI scheme in 1976 with the aim of providing insurance benefits to its members. Primary objective of scheme is to offer financial support to the member's family in event of their sudden demise. Unlike other insurance schemes, there are no exclusions under the EDLI scheme, and all members are eligible for coverage.

We calculate the amount of insurance coverage in the scheme based on the member's salary in the 12 months before their death. We calculate the coverage based on the monthly basic salary and average PF balance of the preceding 12 months. The computation is 35 times the basic average monthly salary, with a cap at Rs. 15,000.

The EDLI scheme is a crucial financial safety net for the dependents of the members in case of their sudden demise. This 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.

Employees' Deposit Linked Insurance Scheme is a group insurance program offered by Employees' Provident Fund Organisation (EPFO) in India. All members contributing to the Employees' Provident Fund (EPF) in organized sector receive life insurance coverage through this scheme.

The EDLI scheme aims to give financial security to the family of a member who dies suddenly. Employers with over 10 employees must engage in the program, and they are responsible for covering the premium costs. The EDLI scheme connects the coverage it offers to the member's EPF balance.

The scheme calculates the assured amount by multiplying 35 with average monthly basic salary (capped at 15000/month). Additionally, the calculation involves considering the average PF balance of the last 12 months (capped at 1.75 Lakhs). This process precedes the deaths of members for 12 months. The minimum sum assured is Rs.2.5 lakhs, and the maximum is Rs.7 lakhs.

• Coverage : EDLI scheme offers life insurance coverage to all EPFO members, including those in organized sector who contribute to EPF.
• Mandatory for Employers : Employers with more than 10 employees must participate in scheme, and the employer is responsible for paying the premium.
• EPF Balance : The member's EPF balance is associated with the coverage offered by the EDLI scheme. This means that the sum assured under the scheme increases as the member's EPF balance grows.
• Cost-effective : The EDLI scheme is 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.
• The calculated sum assured is determined by multiplying 35 with the monthly basic salary. And averaging the EPF account balance for the last 12 months preceding the member's 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.
• The employer bears the cost of the premium.
• The coverage of 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.

Taking part in the EDLI scheme is mandatory for employers with over 10 employees. The contribution is a percentage of the employee's basic salary. The employer deposits their contribution into the EDLI fund. This fund provides life insurance coverage to EPFO members, including organized sector employees contributing to Employees' Provident Fund (EPF).

The sum assured is connected to the EPF balance of the member. The coverage is calculated by multiplying 35 with the average monthly balance in the EPF account. This calculation considers the 12 months preceding the member's death.

The minimum sum assured under the scheme is Rs.2.5 lakhs, and the maximum is Rs.7 lakhs. The EDLI scheme is a crucial social security measure. It ensures financial protection for members' dependents in case of unexpected demise.

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

• 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 EDLI scheme provides a maximum coverage of Rs.7 lakhs, regardless of the employee's higher monthly salary.
• The EDLI formula considers the monthly salary, an upper cap limit, and insurance coverage rate set by the EPFO.
• The formula for EDLI calculation is: EDLI = Monthly salary (up to the cap limit) x 35. For example, if an employee's monthly salary is Rs.20,000, the EDLI coverage will be Rs.7 lakhs, capped at Rs.5.25 lakhs.
• EPFO determines the rate of insurance coverage, and currently, it stands at 0.5% of the monthly basic salary.
• This means that if an employee's monthly salary is Rs 20,000, the maximum rate of insurance coverage will be Rs.75/month. Even if calculated at a rate of 0.5%, the amount comes out to be Rs.100 per 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.

The employer must submit the EDLI claim form to the EPFO to receive the benefits of the EDLI scheme. The EDLI claim form is a document that the nominee or legal heir of the deceased employee needs to fill out. The form needs information like employee's name, EPF account number, date of birth and death, cause of death, and nominee or legal heir details.

Moreover, form necessitates the bank account details of nominee or legal heir, where EDLI benefits will be transferred. To complete the EDLI claim form, gather essential documents. Like the employee's death certificate, the nominee/legal heir's ID and address proof, and a copy of their bank passbook. These documents should be attested by either a gazetted officer or the employer.

Upon submission of the EDLI claim form and required documents to the EPFO, the claim will undergo processing. The EPFO will verify the information provided in the form and the documents submitted. Afterward, the EDLI benefit will be deposited into the bank account of the nominee or legal heir.

The EDLI claim form is essential for the nominee/legal heir of a deceased employee to claim benefits. To ensure the EPFO processes it promptly, accurately fill out the form and provide the required documents.

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 : Start by downloading the EDLI claim form from the EPFO website or collect it from the EPFO office
• Fill out the EDLI claim form : Please include essential information in the form. Like 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 filled EDLI claim form and necessary documents to EPFO office where employee's EPF account is held.
• 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. Upon approval of the claim, 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 claim benefits under the Employee's Deposit Linked Insurance (EDLI) Scheme. The nominee or legal heir of deceased employee must submit specific documents to the Employees' Provident Fund Organization (EPFO). These documents are crucial to establish the ability of the claim and the genuineness 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 employee's death certificate issued by appropriate authority to prove the fact of the employee's death.
• Identity Proof and Address Proof of the Nominee/Legal Heir : To confirm identity and relationship of nominee/legal heir with the deceased employee, various documents are acceptable for proof. These include Aadhaar Card, Voter ID Card, PAN Card, Passport, Driving License, or Bank Statement.
• Nominee/Legal Heir's Bank Passbook : The bank passbook must be in the nominee/legal heir's name to facilitate the deposit of approved EDLI benefit.
• Claim Form : The nominee/legal heir is required to accurately complete the EDLI claim form. By furnishing information like deceased employee's name, UAN number, date of birth and death, cause of death, nominee's details.
• Employer Certificate : The employer needs to certify that the employee was a member of the EPF scheme and had contributed to the EDLI scheme. To be considered valid, a gazetted officer or the employer must attest all the aforementioned documents.

Once the nominee/legal heir submits these documents along with the claim form to EPFO, the claim processing initiates. After approval, the EDLI benefit is deposited into the bank account of the nominee or legal heir.