EPFO, Employees Deposit Linked Insurance Scheme: EDLI i.e. Employee Deposit Linked Insurance Scheme is a special type of insurance scheme, which is being run by EPFO ​​i.e. Employees Provident Fund Organization. This scheme is for all those salaried employees who work in the private sector and are EPF members. Its purpose is that if the employee dies during work, then his family should get a large amount at once so that their financial condition remains strong. Under this scheme, this amount is given to the nominee chosen by the employee.

For whom is EDLI necessary?

This scheme is necessary for all the companies which are registered under the EPF Act 1952. These companies consider it mandatory for their employees to join the EDLI scheme so that their employees can get the benefit of life insurance. EDLI scheme works in conjunction with EPF and EPS (Employees Pension Scheme) so that the family of the employee can get financial help after death. The amount received in this scheme is decided according to the last salary of the employee, and the maximum amount can be up to Rs 7 lakh.

Special features and benefits of EDLI

This scheme benefits those employees whose basic salary is less than Rs 15,000 per month. Even if an employee’s basic salary is more than Rs 15,000, he will still get a maximum benefit of Rs 7 lakh. The amount received in EDLI is calculated on the basis of the average monthly salary of the last 12 months, which can be up to 35 times, but this amount cannot exceed Rs 7 lakh.

The employee does not have to deposit any amount in this scheme, rather every month his employer i.e. the company gives 0.5 percent of his basic salary and DA to EPFO. Also, under the EDLI scheme, a bonus of up to Rs 1.75 lakh is also available, which is like an additional security cover for the employee’s family.

If you have an EPF account, then you are automatically covered for EDLI, there is no need to apply separately for it.

Documents required for EDLI claim

If an employee dies and the family has to avail EDLI benefits, it is important to keep some documents ready. Such as correctly filled Form 5 IF, death certificate of the employee, succession certificate if the claim is being made by the legal heir, and guardian certificate if the claim is being made by a guardian for a minor. Apart from this, a copy of a cancelled cheque of the bank account in which the payment is to be made also has to be submitted.

How is EDLI paid?

On the death of the insured person, the registered nominee receives the entire sum assured in lump sum. If no nominee or beneficiary is registered, the amount is given to the legal heir. The calculation of the amount received is something like this:

30 days * average monthly salary of the employee for the last 12 months (maximum Rs 15,000);

In addition, an additional bonus of Rs 2,50,000 will also be given.

Total = Rs 4,50,000 (15,000 * 30 days) + Rs 2,50,000 (bonus) = Rs 7,00,000.

So, the maximum amount you can get under EDLI is Rs 7 lakh.