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All employees who join the Employees’ Provident Fund are covered by the EDLI or Employee’s Deposit Linked Insurance Scheme, 1976. EDLI provides a lump sum payment to the insured’s nominated beneficiary in the event of death due to natural causes, illness or accident. What is Employee Deposit Linked Insurance Scheme? What kind of insurance does EDLI provide? How much is the claim amount? Are there alternatives of EDLI? How can one claim from EDLI?

With effect from 28.04.2021, the EPFO has increased the maximum benefit to Rs.7 lakh for the registered nominees of the deceased member.

Also, with effect from 28.04.2021, the EPFO has extended the benefit to the nominees of the deceased member who have changed their establishment for employment within a period of 12 months preceding the month of their death.

The Ministry had increased the minimum amount of benefit to Rs.2.5 lakh in Feb 2018 for two years. However, the EPFO has further decided to continue with the same minimum benefit of Rs.2.5 lakh with retrospective effect from 15th Feb 2020.

On 12 Apr 2017, the EPFO’s apex decision-making body, the Central Board of Trustees (CBT), has recommended a minimum sum assured of Rs 2.5 lakh in the event of death of a subscriber. At present, the dependants of the deceased get a sum assured of up to Rs 6 lakh. There is no provision of minimum insurance and any benefit for surviving members or in cases of permanent disability under the existing scheme EDLI

What is EDLI?

EDLI or Employee’s Deposit Linked Insurance Scheme provides a lump sum payment to the insured’s nominated beneficiary in the event of death due to natural causes, illness or accident. All employers  to whom the Employee’s Provident Fund and Miscellaneous Provision Act , 1952 applies, have a Statutory liability to subscribe to EDLI to provide for the benefit of Life insurance to all their employees.EPFO has an active subscriber base of more than 45 million and it directly manages a corpus of more than Rs 6 lakh crore. Additionally, more than Rs 2 trillion is managed by exempted establishments or organisations that manage their PF money under EPFO’s overarching guidance. A total of Rs 697.7 crore was contributed under the scheme in FY 14 and claims worth Rs 152.6 crore were settled.  Employee Deposit linked insurance scheme is a comprehensive group term insurance.

  • Every employee who is a member of Provident fund gets covered under EDLI.
  • The coverage is for 24 hours.
  • Employee can be anywhere. Being at the workplace is not necessary.
  • It covers the death of an employee irrespective of the cause. There are no exclusions under this policy.
  • The coverage and premium are the same for every employee irrespective of Age or gender or another factor.
  • The insurance coverage is linked to the pay of the employee, basic + dearness allowance, with the upper limit of Rs 15,000.
  • There is no minimum limit of service to avail of the EDLI benefit.


The EPF & MP Act, 1952 provided for PF and a family pension scheme for employees from 1971 onwards. However, it was felt that problems arising out of early death of the employee were left un-addressed. So the Act was amended to incorporate an insurance scheme, called the Employees’ Deposit Linked Insurance or EDLI Scheme in 1976. The objective of EDLI was to put in place a mechanism to provide employees families with income security after the death of the member, while the employee is in service. EDLI scheme provides for a lump sum payment to the insured’s nominated beneficiary in the event of death due to natural causes, illness or accident.

How much insurance cover does one get under Employee Deposit Linked Insurance Scheme?

At present, only subscribers who have worked for one year continuously in the same organisation is eligible for the insurance cover. The nominee of the subscriber gets 20 times of average wage drawn during the past 12 months with 20% bonus on it. This means, on a wage ceiling of Rs 15,000 every month, the maximum amount assured works out to be Rs 3.6 lakh

But in Sep 2015, the EPFO announced increase in the maximum amount assured under its Employees Deposit Linked Insurance Scheme (EDLI) to Rs 6 lakh from the existing Rs 3.6 lakh. The claim amount of the EDLI is decided by the last drawn salary of the employee. The claim amount would be

  • 30 times the salary.For this calculation salary is basic pay plus DA or Dearness Allowance. The upper limit of wage for the EDLI is Rs 15,000. 
  • Along with this, the bonus of Rs 1.5 lakh is also given.
  • Thus, the maximum EDLI claim amount would be Rs 6 lakh [(30 x15,000) + 1,50,000].

The condition of continuous employment of one year under current employer before being eligible for insurance benefits was also removed.

Improving the attractiveness of the Provident Fund and similar schemes under the law governing them has become a key challenge for the EPFO. Especially, as the government has decided to give formal sector workers a choice between EPFO and NPS. To make NPS more attractive, the government has even introduced an additional income tax deduction of Rs 50,000 for contributions from subscribers to a fund chosen by them. At the time of retirement, the person gets a lump sum amount depending on the performance of that fund. NPS was introduced in 2004 for new government employees; it was extended to all on a voluntary basis from 2009

Who pays the premium for the EDLI?

It is entirely funded by the employer, which contributes 0.5% of monthly basic pay (capped at a maximum of Rs 15,000) as premium for life cover in case the organization does not have a group insurance scheme for its employees. It is estimated that out of 4.5 crore EPFO subscribers, about 80 lakh opt for other private group insurance plans after seeking exemption from EDLI. The breakup of the employee and employer contribution is given below. Our article Basics of Employee Provident Fund: EPF, EPS, EDLIS talks about EPF, EPF, EDLIS in detail.

Scheme Name Employee contribution Employer contribution
Employee provident fund 12% 3.67%
Employees’ Pension scheme 0 8.33%
Employees Deposit linked insurance 0 0.5%
EPF Administrative  charges 0 1.1%
EDLIS Administrative charges 0 0.01%

Alternatives of EDLI

An employer can opt out of EDLI but he has to go for  group term insurance cover to all the employees and the benefit of such group term insurance scheme should be equal to or better than the EDLI. The EPFO itself approves the group term insurance scheme in lieu of EDLI. There are many insurance companies that have filed for this product under IRDA and provide higher coverage than EPFO. Also, for the same, premium charged is lesser than 0.5 per cent . With an insurance company, the employer has another advantage i.e. flexibility of flat coverage across all employees irrespective of the pay (low basic pay employees will enjoy higher coverage which otherwise might not fulfil the EPFO coverage criteria/ conditions) or graded based on the basic pay. This is a yearly renewable product. Hence, the above steps should be repeated as and when the validity of EPFO approved exemption expires. Some of the group term insurance available as alternative to EDLI are:

How does EDLI differ from ESIS?

ESIS or Employees State Insurance  is a self-financing social security and health insurance scheme for Indian workers. Employees who earn less than Rs. 15,000 are covered under this scheme. The employees registered under ESIS are entitled to medical treatment for themselves and their dependants, unemployment cash benefit in certain contingencies and maternity benefit in case of women employees. In case of employment-related disablement or death, there is provision for a disablement benefit and a family pension, respectively. All states are covered under ESIS except Manipur, Sikkim, Arunachal Pradesh and Mizoram.  More information about ESIS

What is Procedure To Claim EDLI Amount

In case of an unfortunate death of the employee, during the active service at the time of death.

  • The nominee can claim the insured amount. If there is no nominee, the legal heir can claim the amount. In case the claimant is minor it should be filled up by the guardian on his / her behalf.
  • To claim EDLI, the form 5 should be used. The EDLI claim form should be submitted along with Form 20 and form 10D/10C (for claiming the Provident Fund dues and Pension/Withdrawal Benefit as applicable). It facilitates to process the benefits of the scheme in one go.
  • All details should be written in BLOCK LETTERS and there should not be any overwriting.
  • In case the deceased member was a married female, her Husband’s name should be mentioned in the column 1 (b) of the form.
  • Details of Bank Account for receiving payment: Correct name, branch and address of the Bank where the claimant is maintaining account should be furnished as payment is sent directly to the Bank.
  • For ensuring correctness of bank details, a copy of the blank/cancelled cheque should be attached with the claim form. The form has to be filled up separately by each claimant.

Documents To Be Enclosed while submitting the claim for EDLI

  • Death Certificate of the employee.
  • Guardianship certificate if the claim is on behalf of a minor family member/nominee/legal heir is by other than the natural guardian.
  • Succession certificate in case of claim by the legal heir.
  • Copy of a cancelled/blank cheque of the bank account in which payment is opted.
  • In case the members were last employed under an establishment exempted under the EPF Scheme 1952, the employer of such establishment should furnish the PF details of last 12 months under the Certificate part and also send an attested copy of the Member’s Nomination Form.

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Improving the attractiveness of the Provident Fund and similar schemes under the law governing them has become a key challenge for the EPFO. Especially, as the government has decided to give formal sector workers a choice between EPFO and NPS. EPFO has been also been keeping up with changing times, moving to digital mode and now also has an App for the mobile phones. Along with salary one needs to understand the EPF related concepts also. Please do share what else does a salaried person needs to understand.