If you have been an EPF member and have opted for the EPF Deposit-Linked Insurance Scheme (EDLI), it could be a significant financial help to your family if you die while in service. Whether young or old, the EDLI scheme can be a considerable help to the deceased’s family.

The Employees’ Provident Fund Organisation (EPFO) launched the Employees’ Deposit-Linked Insurance Scheme (EDLI) in 1976 to provide death cover to employees working in an establishment covered under the EPF Act for at least a year. The scheme assures financial assistance to the employee’s dependent family members in case of their untimely death.

The EPF Deposit-Linked Insurance Scheme is available to all employees of establishments covered under the Employees’ Provident Funds and Miscellaneous Provisions Act 1952 (EPF Act).

One of the scheme’s unique features is that, unlike other insurance schemes, the employee doesn’t contribute towards the policy; instead, the employer pays a percentage from the employee’s monthly salary, a minimum of 0.5 percent up to a ceiling of Rs 15,000. However, EPF members can opt out of EDLI if they want to buy another insurance policy.

Under EDLI, the employee’s legal heirs are entitled to a maximum assured benefit of Rs 7 lakh if the EPF member dies in service.

Other Key Features of the Scheme

The scheme’s coverage applies even if the employee changed jobs in the past 12 months before death. The insurance money is credited to the legal heir’s bank account. The employees get enrolled in the EDLI scheme by default if the organizations are covered under the EFF Act, although they can opt out of the scheme if they wish to get a higher-paying insurance plan.

Unlike the EPF scheme, where both the employee and the employer contribute, in the EDLI scheme, only the employer contributes—a minimum of 0.5 percent of basic plus dearness allowance (DA).

There is no restriction on companies they work with, but the scheme will kick in only if they have continuously worked for a year and have been an active member of EPF.

Regarding the claim process, the nominee can apply for EDLI, PF, and pension benefits of the deceased member through a composite form. The nominee must also submit a death or succession certificate and a canceled cheque of the bank account in which the payment is to be made.

EDLI Calculation:

If an employee has worked for more than a year in one or more establishments, the payment will be 35 times the average of the last 12 months’ salary (a maximum of Rs. 15,000), and 50 percent of the monthly average balance in the previous 12 months (a maximum of Rs 1,75,000). So, the maximum amount can be Rs 7 lakh.