EDLI Scheme: Provident Fund (PF) accounts have always been a crucial support for salaried individuals. The money deposited in these accounts acts as a retirement fund for employees. The Employees’ Provident Fund Organization (EPFO) manages these provident fund accounts. When you start working at a company with a minimum monthly salary of Rs 15,000, a PF account is set up for you. Under this plan, 12% of an employee’s basic salary is contributed to their PF account each month, with the employer matching that contribution.
All employees benefit from PF, pension, and life insurance through the EPFO. This is known as the Employees’ Deposit Linked Insurance (EDLI) scheme. Let’s dive into what the EDLI scheme entails. How much coverage does it offer? What is the company’s contribution? How is the amount that an employee’s nominee receives after their death determined? How can the family claim insurance under the EDLI scheme when a PF holder passes away?
What is the EDLI scheme?
The Employees’ Deposit Linked Insurance (EDLI) scheme was introduced in 1976. Basically, the EDLI scheme mandates that all employees registered with the Employees’ Provident Fund (EPFO) contribute to life insurance. If the policyholder dies due to natural causes, illness, or an accident, a lump sum is paid to their nominee. This benefit is provided by both the company and the central government.
How much is the insurance? The initial limit for this scheme was Rs 3.60 lakh. In September 2015, the EPFO raised this limit to Rs 6 lakh, and it was later increased to Rs 7 lakh. Now, if an employee dies while still in service, their nominee receives a lump sum of Rs 7 lakh.
Under EDLI , the employee doesn’t have to pay any money. The employer pays the premium on the employee’s behalf. If an employee has completed at least one year of service with a company and dies due to an accident or illness, their family or nominee will receive the benefits of this insurance scheme.