Employees Deposit Linked Insurance Scheme – EDLI
In this modern world, it is important for every individual to have proper insurance cover due to the increasing stress and pollution. So, EDLI (Employees Deposit Linked Insurance Scheme) was brought in to the picture by the government in 1976 to safeguard the interest of private organization employees.
EDLI – Employees Deposit Linked Insurance Scheme
EDLI falls under the Employees Provident Fund Organization (EPFO) and provides life insurance cover for the private sector employees in case of any miss-happening. In addition to this every employee of the organization that falls under the Employees Provident Fund and Miscellaneous Provisions Act, 1952 gets automatically enrolled for EDLI, if an enterprise adopts it.
Under EDLI the nominee gets the lump-sum amount in case if the insured person dies during his/her service period. So, through this, we can conclude that the main motive behind the introduction of EDLI is to provide financial assistance to the family member of the deceased. However, this lump-sum amount depends wholly upon the last withdrawn salary of the deceased employee.
Here are the major features of the EDLI:
- EPFO member gets enrolled for EDLI automatically if an enterprise adopts it.
- Legal heirs, nominee or family member can easily claim for the insurance.
- No minimum service tenure is required for availing the benefit of EDLI. However, to claim this benefit he/she should be an active member of EPF.
- The whole contribution of EDLI shall be contributed by the employer and nothing must be deducted from the salary of the employee on the account of EDLI.
- Every employee who is having a basic salary of 15K INR will get the benefit of EDLI. However, any employee who is having a salary of more than 15K INR will receive the benefit of 6,00,000 INR including 1,50,000 bonus.
Note: For the purpose of basic salary calculation for EDLI, basic salary shall include dearness allowance.
- In case if the employer is providing higher paying life insurance cover to his employees then he must opt out of this scheme as per Section 17 (2A).
Calculation of EDLI Charge
The nominee, family member or the legal heir will get the lump-sum amount of 30 times of the 12 months basic salary (including dearness allowance) of the deceased employee.
Now let us understand this with an example:
- The maximum capping for average monthly salary for the last 12 months is mentioned at 15,000 INR per month.
- Henceforth, 30 times of average monthly salary turns out to be 15,000 X 30 = 4,50,000 INR.
- In addition to this, the beneficiary will also get the bonus of 1,50,000 INR.
- After adding both these amount, the beneficiary will enjoy 6,00,000 INR of benefit.
Here is the contribution chart of all the three schemes under EPFO:
EPF 12 % of Basic + DA 3.67% of Basic + Dearness Allowance EPS N/A 8.33 % of Basic + Dearness Allowance EDLI N/A 0.5% (subject to a maximum of ₹ 75)
12 % of Basic + DA
3.67% of Basic + Dearness Allowance
8.33 % of Basic + Dearness Allowance
0.5% (subject to a maximum of ₹ 75)
Procedure to claim EDLI
Here is the procedure to claim EDLI:
- The EDLI benefit can be claimed either by
- In case there is no nominee then the family member- spouse, male children of up to 25 years of age or unmarried daughter.
- In case if there is no nominee and family member then, in that case, the benefits of EDLI can be claimed by the legal heirs.
- Form 5-IF shall be filed by the claimant
- Before the death of the deceased, he/she should be an active contributor towards EPF Scheme
- The employer shall sign and certify the claim form
- If in case there is no employer then the claim form shall be attested by any of the following
- G.O. (Gazetted Officer)
- Village Panchayat President
- Municipal Chairman/Secretary/Member or District Local Board
- Postmaster or Sub-postmaster
- CBT Member / Regional Committee of EPF Member
- Bank Manager of the same bank in which account was maintained
- The EDLI benefit can be claimed either by
Documents Required for EDLI
Here is the list of documents that are required for EDLI:
- Along with Form 5-IF, the claimant has to submit the following documents in order to claim the benefit under the EDLI scheme:
- Death Certificate of the deceased member
- Guardianship certificate is required if the person who is not a natural guardian wants to claim the EDLI benefit on behalf of a minor family member or nominee / legal heir.
- In the case of legal heir, succession certificate is required.
- Cancelled cheque of the bank in which the payment has opted.
If the deceased person is employed under that organization in which EPF Scheme 1952 does not apply in that case the employer shall mention the last 12 months PF details in the certificate and shall send an attested copy of nomination form of that deceased person.