The Employees Deposit Linked Insurance Scheme (EDLI), launched in 1976 by the Employees’ Provident Fund Organisation (EPFO), continues to serve as a crucial safety net for millions of private-sector employees across India. Designed to provide financial support to the families of salaried workers in the event of their untimely death during service, EDLI operates alongside the Employees’ Provident Fund (EPF) and Employees’ Pension Scheme (EPS).
What the scheme offers
Under the EDLI scheme, the registered nominee or legal heir of a deceased employee receives a lump-sum payment. The benefit amount is directly linked to the employee’s last drawn salary and is capped at ₹7 lakh, following the latest enhancement by EPFO effective April 28, 2021.
The scheme ensures coverage for all employees who are members of EPFO, with no exclusions — meaning it applies round the clock and even covers deaths occurring abroad. Importantly, employees do not contribute toward EDLI; the contribution is made solely by the employer, calculated as 0.5% of the employee’s basic salary, capped at ₹75 per month.
Key features & benefits
- Uniform Coverage: Applicable to all employees drawing a basic salary up to ₹15,000 per month.
- Maximum Benefit: 35 times the average monthly salary (subject to the ₹7 lakh cap).
- Bonus Component: A fixed bonus of ₹1.75 lakh added to the calculated payout.
- Minimum Payout: ₹2.5 lakh, extended retrospectively from February 15, 2020.
- Automatic Eligibility: Any employee covered under EPF automatically receives EDLI coverage.
- Employer Flexibility: Companies may opt for an alternative group life insurance policy if its benefits are equal to or exceed those under EDLI.
The payout calculation currently stands as: 30 × Average Monthly Salary (capped at ₹15,000) + ₹2.5 lakh bonus = ₹7 lakh maximum benefit.
Eligibility & Claim process
All organisations with 20 or more employees must register under the EPF Act, automatically enrolling their workforce into the EDLI scheme. Family members eligible for benefits include the spouse, unmarried daughters, and sons up to 25 years of age.
In the event of an employee’s death, the nominee or legal heir can claim benefits by submitting Form 5 IF along with necessary documents such as the death certificate, guardianship or succession certificate (if applicable), and a cancelled cheque.
If the employer’s certification is unavailable, the form can be attested by public officials like MPs, MLAs, bank managers, or gazetted officers. Once the application is submitted to the regional EPF office, the claim must be settled within 30 days, failing which 12% annual interest is payable on delays.
Opting out & Alternative options
Employers can choose to opt out of EDLI coverage under Section 17(2A) of the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952, provided they offer a higher-paying group life insurance scheme for their employees.
The EDLI scheme remains one of the cornerstones of India’s employee welfare framework, offering a meaningful financial cushion to the families of private-sector workers. By combining affordability for employers and assurance for employees, it reinforces EPFO’s broader goal — ensuring social and financial security for the nation’s workforce.