The EDLI is a scheme that stands for Employees’ Deposit Linked Insurance Scheme. It is an insurance cover provided by EPFO (Employees Provident Fund Organization) for private-sector employees who miss the social and financial security received by public sector employees. In order to extend the benefits of life insurance to the employees of the private sector, the government introduced EDLI in the year 1976.

EDLI scheme is eligible for all the organizations registered under EPF (Employees Provident Fund) and Miscellaneous Provisions Act, 1952. Nominee of EPFO gets a lump sum amount of up to INR 6 Lakhs in case of death of the member during the service period.

Attributes of EDLI Scheme

  • All the employees with the basic salary under INR 15,000/- are applicable for EDLI Scheme. In case the salary of any employee is above 15,000/- per month, the maximum benefit is INR 6 lakhs.
  • A bonus of INR 1,50,000/- is available under the EDLI Scheme
  • Employees need not contribute to EDLI, their contribution is required only in EPF
  • Any organization that has more than 20 employees needs to register for EPF. Therefore, any employee who has an EPF account automatically becomes eligible for the EDLI scheme.
  • An organization can choose another group insurance scheme, but the benefits offered must be equal to or more than those offered under EDLI.
  • As per the provisions of the EDLI, the contribution of an employer must be 0.5% of the basic salary or a maximum of Rs. 75 per employee per month. If there is no other group insurance scheme, the maximum contribution is capped at Rs. 15,000/- per month.
  • For all calculations under EDLI, dearness allowance must be added to the basic salary.

Calculation of EDLI Charge

The pay-out to be awarded will be calculated as under:

{Average Monthly Salary of the Employee for the last 12 months (capped at 15,000/- p.m.) x 30} + Bonus Amount (Rs. 1,50,000/-)

Therefore, the maximum pay-out under EDLI is capped at Rs. 6,00,000/-

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