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The EDLI scheme is a government-backed life insurance scheme linked with the Employees’ Provident Fund (EPF) account of salaried employees working in the organised sector. The main purpose of the scheme is to provide financial support to the nominee or legal heir if an employee passes away during active service. Employees who are covered under EPF automatically become part of the EDLI scheme without paying any separate premium amount.
Key Takeaways
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EPF-covered members are automatically covered under EDLI, and no separate employee premium is required.
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The scheme provides a standard minimum benefit of ₹2.5 lakh and a maximum of ₹7 lakh, subject to the latest EPFO rules.
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If an employee dies before completing one year of continuous service, a minimum benefit of ₹50,000 is provided.
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Claim settlement requires Form 5 IF and supporting documents for verification.
What is the Full Form of EDLI?
The full form of EDLI is Employees’ Deposit Linked Insurance Scheme. EDLI is a statutory life insurance scheme linked to EPF membership that provides a lump-sum benefit to the nominee or eligible family member if an EPF-covered employee dies while in service.
EPF-covered members are automatically covered, and no separate employee premium is required. Under the current EDLI framework, the benefit ranges from ₹2.5 lakh to ₹7 lakh, subject to EPFO rules.
Features of the Employees’ Deposit Linked Insurance Scheme
The employees’ deposit-linked insurance scheme provides insurance coverage and financial support to EPF members and their families. Key features of the scheme are given below:
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Automatic coverage: Employees who are enrolled under EPF automatically become part of the EDLI scheme without any separate registration.
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Maximum insurance benefit: Eligible nominees or legal heirs can receive a minimum assured benefit of ₹2.5 lakh and a maximum benefit of up to ₹7 lakh, subject to the latest EPFO rules.
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No employee contribution: Employees are not required to pay any separate premium amount for EDLI coverage.
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Employer contribution: Employers contribute 0.5% of the employee’s basic salary + dearness allowance towards the scheme, subject to the prescribed limit.
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Coverage during overseas employment: EDLI benefits may be available if the employee passes away while working outside India, subject to applicable EPFO rules and employer compliance.
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Alternative insurance option: Employers may choose another group insurance plan only if it offers benefits equal to or higher than EDLI.
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Claim process: As per EPFO guidelines, EDLI claims are generally processed within 20 - 30 days after submission of complete documents.
Also Read About : EPF — Employees’ Provident Fund
EDLI Scheme Eligibility
The following are the key eligibility conditions of the Employees’ Deposit Linked Insurance (EDLI) Scheme:
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Employees who are registered under the EPF scheme are eligible for EDLI coverage.
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The scheme generally applies to organisations with 20 or more employees.
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Employees become part of the scheme automatically through their EPF account.
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If the employee dies while in active service, the nominee or legal heir can claim the benefit amount.
Note: Certain establishments, such as tea factories in Assam, may be exempt from EDLI applicability under specific provisions.
Also Read About: National Saving Scheme (NSS)
Documents Required To Payout Under EDLI
To claim benefits under the employee's deposit-linked insurance scheme, the nominee or legal heir needs to submit a few important documents during the claim process. These documents include:
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Duly filled Form 5 IF for EDLI claim settlement.
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Death certificate of the employee.
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Copy of cancelled cheque or bank account details of the claimant.
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Succession certificate if the claim is made by a legal heir.
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Guardianship certificate in case the claim is filed for a minor nominee.
Also Read About : How to Check EPF Balance With and Without UAN?
Benefits of EDLI Scheme
The EDLI scheme provides financial protection to EPF members and supports their families during difficult situations. Some important benefits of the scheme are given below:
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Insurance coverage for family members: The scheme provides financial assistance to the nominee or legal heir if the employee dies during active service.
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Automatic insurance coverage: Employees registered under EPF automatically become part of the EDLI scheme without separate registration.
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No separate employee contribution: Employees are not required to pay any extra premium amount for receiving EDLI benefits.
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Higher claim benefit: Eligible nominees or family members can receive insurance benefits of up to ₹7 lakh under the scheme.
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Support during emergencies: The benefit amount helps families manage financial needs and expenses after the employee’s death.
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Worldwide coverage: The insurance benefit remains applicable even if the employee dies outside India during employment.
Overall, the EDLI scheme acts as an important financial support system for employees’ families during unexpected situations.
Calculation Of EDLI Charge
The EDLI charge is the employer’s contribution to the scheme, calculated at 0.50% of basic wages plus dearness allowance, subject to the applicable wage ceiling.
Employees do not contribute separately, and the amount is used to fund the insurance benefit payable to the nominee or legal heir
Steps Involved in Getting EDLI Claim Benefits
To receive the EDLI claim amount, the nominee or legal heir must complete a few important steps and submit the required documents for verification. The process is generally simple if all details are provided correctly.
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Step 1: Fill out Form 5 IF with the employee and claimant details.
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Step 2: Attach the required documents, such as the death certificate, identity proof, and bank account details.
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Step 3: Submit the claim form to the employer for verification and signature.
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Step 4: The claimant submits Form 5 IF with supporting documents through the last employer, where required, and the EPFO processes the claim after verification.
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Step 5: The EPF office reviews the documents and checks the claim details.
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Step 6: If everything is correct, the claim amount is approved and transferred to the nominee’s bank account.
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Step 7: The nominee may receive confirmation after successful settlement of the claim.
Also Read About : EPF vs EPS: Pension Schemes in India
Important Consideration For Employees Deposit Linked Insurance Scheme
Before applying for benefits under the employees deposit linked insurance scheme, employees and family members should keep a few important points in mind to avoid delays during the claim process.
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Active EPF membership: The employee should be an active EPF member at the time of death for the claim to be considered.
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Nominee details: The nominee registered in the EPF account is eligible to apply for the EDLI claim amount.
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Claim by legal heir: If no nominee is registered, the legal heir or eligible family member can file the claim with supporting documents.
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Proper document verification: All claim forms and documents should be correctly verified and signed before submission.
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Correct bank information: Bank account details of the claimant should be accurate to avoid delays in payment settlement.
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Employer attestation: The employer’s verification is generally required during the claim process as per EPF guidelines.
Understanding these points can help nominees and family members complete the EDLI claim process more smoothly.
Also Read about: How To Check EPF Claim Status Online?
Conclusion
The EDLI scheme is an important financial support system linked with the EPF account of salaried employees. It helps provide insurance benefits to the nominee or family members if the employee dies during active service. Since employees are automatically covered under the scheme through EPF membership, it offers added financial security without any separate contribution from the employee. Understanding the eligibility, claim process, and benefits can help families avoid confusion during difficult situations.
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