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Employees Deposit Linked Insurance Scheme (EDLI)

EDLI Scheme

Employees Deposit Linked Insurance Scheme (EDLI)

The Employees Deposit Linked Insurance Scheme (EDLI) scheme was enacted as a part of the benevolent social legislation passed by the Government of India in the year 1976. The EDLI scheme is an insurance scheme promulgated by the Government among other social welfare initiatives for the employees of the organised sector. Under this scheme, a lump sum payment is provided to the beneficiary of the employee in case of he/she dies during the service period. An organisation that is covered under the Employee’s Provident Fund (EPF) and Miscellaneous Provision Act 1952 are liable to subscribe EDLI scheme. In this article, we look at the Employees Deposit Linked Insurance Scheme (EDLI) in detail.

Features of EDLI Scheme

Features of EDLI scheme is explained in detail below:

  • EDLI scheme is applicable to employees (private organizations) who are registered under EPF.
  • All eligible employees are automatically covered under EDLI Scheme. No separate application is required for enrolment of this scheme.
  • EDLI Scheme covers all employees irrespective whether they are working or retired. Only condition is that they should be member of the EPF.
  • Life Insurance coverage would be based on the employee’s basic salary i.e. Basic Salary plus Dearness Allowance (DA).
  • Life Insurance coverage is applicable even for new employees once they are enrolled in EPF.
  • No separate nomination is required for EDLI Scheme
  • Age or other individual factors do not affect the employee’s eligibility to be covered under EDLI scheme.

Advantages of EDLI Scheme

Main advantages of EDLI scheme is explained in detail below.

Advantages to the Employer

  • The premium payable by the employer for EDLI scheme is usually less than the total contribution being paid by the employer to other schemes; particularly when the salary level is high and average age of the employee is low.
  • Settlement of claim is quicker; LIC requires only the death certificate and the Claim application form from the employer.
  • EDLI Premium paid by the employer is treated as normal business expenses for Income-Tax purpose.

Know more about  Tax Free Perquisites

Advantage to the Employee

As per EDLI scheme, monetary benefit known as ‘Assurance benefit’ will be provided to the nominated or eligible dependent family members in the event of death of the employee. This amount is based on his/her last twelve months average salary and average balance in the provident fund account.

Know more about PF Balance Check

Contribution by Employer

Employee does not contribute to EDLI scheme directly. Contributions are made by the employer. Contributions to EDLI scheme are done in accordance with a formula of a fixed percentage of DA and salary. Employer contributes for EDLI premium for maximum of 0.5% of Rs 15000 of monthly basic average wage in the last 12 months. Clearly talking that, maximum premium payable by employer is Rs 0.5% of 15000 i.e. Rs 75 per month.


Contribution by Employer

Contribution by Employee

Contribution by Government

Employees Provident Fund (EPF) 1.67-3.67% 10-12% Nil
Employees Pension Scheme (EPS) 8.33% Nil 1.16%
Employees Deposit Linked Insurance Scheme (EDLI) 0.5% Nil Nil

EDLI Calculation

EPF Life Insurance amount is calculated based on the average monthly basic wages drawn, maximum of Rs 15000 per month during the last twelve months (preceding the month in which death of the employee occurs) is multiplied by 30 times and to that 50% addition to the average balance maintained earlier or lowest in their PF account whichever is earlier.  

Life Insurance Amount

As described, under the EDLI scheme, the nominee of the employee can get a maximum of claim of 30 times the salary drawn. The maximum salary for this calculation is capped at Rs.15000. An additional bonus of up to 150000 is also provided.

Maximum Amount

Maximum Life Insurance coverage under EDLI scheme is Rs 6 Lakhs. Calculation as below

30 times of Rs.15000 = Rs.450000 + Rs.150000 = Rs. 600000

Minimum Amount

Minimum Life Insurance coverage under EDLI scheme is Rs 2.5 Lakhs.

Note: In the case of a part-time employee who was a member of the provident fund while serving in more than one factory, the quantum of benefit under EDLI Scheme will be determined with reference to the average of the balance in his provident fund accounts during the preceding twelve months.

Eligible Person to Claim EDLI Amount

The following persons are eligible to claim EDLI scheme amount in case of the death of the employee

  • Nominees made by an employee under Employees Provident Funds Scheme
  • If no nomination subsists whole amount will become payable to the members of his family in equal shares.
  • No share shall be payable to following family members:
    • Sons who have attained majority
    • Sons of a deceased son who have attained majority
    • Married daughters whose husbands are alive
    • Married daughters of a deceased son whose husbands are alive
  • The widow and the child of a deceased son will receive the amount in equal parts.
  • Legal heirs can claim the amount if there is no family members and no nominee registered
  • In case of nominee is minor, guardian of the minor person can claim the amount

Documents Required to claim EDLI

To claim EDLI amount, below mentioned documents have to be submitted.

  • Application form in Prescribed Format
  • Death certificate of the Employee
  • Guardianship Certificate – If the EDLI claim is being made on behalf of a minor family member or nominee, the legal guardian have to submit the guardianship certificate.
  • Succession certificate – In case of claim is being made by a legal heir of the employee.
  • Bank account details in which the claim funds are to be deposited.

Procedure to Claim EDLI

EPF life insurance amount can be claimed by the eligible persons, the procedure to apply for EDLI scheme is explained in detail below.

Note: The EDLI Claims can only made if the deceased person was actively employed at the time of death.

Step 1: Application form in prescribed format should be duly filled out.


Step 2: The application for claim must be attested by the employer.

In case the employer is not available to attest the application form, attestation can be done with any of the following officers.

  • Gazetted Officer
  • President of Village Panchayat
  • Magistrate
  • Chairman / Secretary / Member of Municipal or District Local Board
  • MP or MLA
  • Postmaster or Sub Postmaster
  • Bank Manager concerned
  • Member of CBT or Regional Committee of EPF

 Step 3: Attested copy of application form along with all supporting documents need to submitted to commissioner

Step 4: After verification of application form and supporting documents, Commissioner will sanction the EDLI claim amount.

The EDLI scheme amount will be directly credited to the beneficiary’s account.