EDLI Scheme: If you are a private employee, then every month a small amount of money is deducted from your salary and it goes into your PF account. Most people think that this money will be used only for retirement, but this is the real game. In this, another scheme is linked with PF, which is called Employees’ Deposit Linked Insurance Scheme (EDLI).
This is not an ordinary scheme, but a life insurance facility of the government body EPFO, which provides great relief to the family in difficult times. If an employee dies during his job, then his family members can get insurance cover of up to Rs 7 lakh under this, that too without spending a single rupee.
In October last year, Labour Minister Mansukh Mandaviya announced that the enhanced benefits under this scheme would be retrospectively extended from April 2021. This means that even those who change jobs or have previous claims will now benefit from this scheme.
The Employee Deposit Linked Insurance Scheme (EDLI) is a major support for millions of private sector employees in India. The Employees’ Provident Fund Organization (EPFO) launched this scheme in 1976. It works in conjunction with the Employees’ Provident Fund (EPF) and the Employees’ Pension Scheme (EPS). Its purpose is to provide financial assistance to an employee’s family in the event of their sudden death while on the job.
What are the benefits of EDLI?
Under the EDLI scheme, if an employee dies, their nominee or legal heir is given a lump sum. This amount is based on the employee’s last drawn salary. Effective April 28, 2021, the EPFO has set a maximum limit of Rs 7 lakh for this amount. Significantly, the employee does not have to make any contribution to this scheme. The entire cost is borne by the employer, who contributes 0.5% of the employee’s basic salary.
This amount is limited to a maximum of Rs 75 per month. This scheme covers every employee who is a member of the EPF, with no exceptions. Whether the employee dies in India or abroad, their nominee will receive the benefit. Furthermore, this coverage is applicable 24 hours a day. This means it provides protection not just during work hours, but at all times.
What are the rules for employers?
The EDLI scheme also offers employers certain exemptions. If a company wishes, it can opt out of EDLI under Section 17(2A) of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. However, it must obtain a group life insurance policy for its employees that offers benefits equal to or better than EDLI. This ensures that employees’ interests are protected.
The EDLI scheme is a vital component of India’s employee welfare framework. It not only provides financial security to employees’ families, but is also easy to implement and cost-effective for employers. This scheme fulfills the EPFO’s larger objective of ensuring the social and economic well-being of the country’s employees and their families.
