BAJAJ BROKING
June 18, 2025
4 mins read
The Employees Deposit Linked Insurance (EDLI) Scheme is a type of life insurance scheme provided to employees covered under the EPF (Employees’ Provident Fund). It offers financial support to the family members of an employee in case of death during the period of employment. The scheme ensures that even if an employee passes away, their dependents receive a lump sum amount based on the employee’s last drawn salary. The EDLI Scheme is automatically linked to the EPF account. Employers contribute towards the employees deposit linked insurance scheme on behalf of their employees, making it a valuable financial safety net for families.
The EDLI Scheme is closely linked to the EPF and EPS schemes. If you work for an organisation that is eligible for EPF, you are automatically covered under the EDLI Scheme. Employers are required to contribute to the EDLI along with their regular EPF contributions. This contribution provides a financial safety net for your family in case of your untimely death during employment.
Every month, when your employer contributes to the EPF account, a portion of that contribution goes towards the employees deposit linked insurance scheme. The breakdown of the employer’s contribution is as follows:
3.67% of your basic salary and dearness allowance is directed to your EPF account.
8.33%, capped at ₹1,250, goes to the Employees’ Pension Scheme (EPS).
0.50%, capped at ₹75, is allocated to the EDLI account.
If your employer opts for a group life insurance policy that provides coverage equal to or greater than the EDLI benefit, they can choose to opt out of the EDLI Scheme. However, in the absence of a group life insurance policy, the employer’s contribution to the employees deposit linked insurance scheme can be increased up to ₹15,000 per month.
The primary objective of the EDLI Scheme is to provide financial security to the family of a deceased employee. In the event of death while still employed, the nominee receives a lump sum payout. The payout amount is calculated as 35 times the average monthly salary, with a maximum limit of ₹7 lakh, including a fixed bonus of ₹2,50,000.
Therefore, if you are employed by an organisation covered under the EPF scheme, you are automatically enrolled in the EDLI Scheme. This scheme ensures that your family is financially protected in case of your untimely demise, offering them a financial cushion during difficult times.
The maximum coverage under the EDLI Scheme is ₹7 lakh, combining the insurance amount and the bonus.
Only the employer contributes to the EDLI Scheme, and the employee is not required to pay anything.
The scheme is linked to the EPF account, ensuring that all EPF members are automatically covered.
The employee must register a nominee for receiving the EDLI benefit.
The claim can be filed only once, regardless of the number of employers the employee had.
There is no medical examination or health check-up required to be covered under the EDLI Scheme.
The coverage under the scheme continues as long as the employee is a member of the EPF.
To meet the EDLI Scheme eligibility requirements, you must qualify on the following grounds:
You must be a member of the EPF Scheme.
You must earn up to ₹15,000 per month.
Your employer must be contributing to the EPF and EDLI schemes.
If you have worked for multiple employers, only the last employer’s contribution is considered for calculating the EDLI benefit.
Remember that you are eligible for the EDLI Scheme from the date of joining the EPF scheme until the date of exit from employment.
The benefits and coverage details under the employees deposit linked insurance scheme are outlined below:
Benefit Type | Coverage Amount |
Insurance Payout | 35 times the last drawn salary |
Bonus | ₹1,75,000 |
Maximum Payout | ₹7,00,000 |
Minimum Assured Benefits (only if the deceased employee was in continuous employment for 12 months before their demise) | ₹2,50,000 |
Multiple Employers | Only the last employer’s contribution is considered |
The following documents are needed when submitting a claim under the employees deposit linked insurance scheme:
Start by notifying the last employer about the employee’s death. This step is important because the employer will guide you through the claim process and provide the necessary forms.
Request Form 5 IF from the employer. Fill it out carefully, including details like the deceased employee’s EPF account number, UAN, and nominee information. Ensure all information is accurate to avoid delays.
Attach essential documents with the filled-out Form 5 IF. These include:
Death certificate of the employee
Bank account details of the nominee
Valid ID proof of the nominee
Hand over the completed form and the attached documents to the last employer. The employer will review the form for accuracy and verify the details.
The employer checks the form and confirms the information. Once verified, they forward the claim form and documents to the EPFO for further processing.
The EPFO reviews the claim and verifies all submitted details. Once approved, the EPFO disburses the EDLI amount directly to the nominee’s bank account. Keep track of the claim status through the EPFO portal or by contacting the employer.
Now that you know all about the ELDI scheme eligibility and coverage, lets see how contributions to the scheme compares to EPS and EPF:
Component | Employee Contribution | Employer Contribution |
EPF | 12% of Basic Pay | 3.67% of Basic Pay |
EPS | - | 8.33% of Basic Pay |
EDLI | - | 0.5% of Basic Pay |
The employees deposit linked insurance scheme benefit is calculated using the formula:
EDLI Amount = 35 × Average Monthly Salary + ₹2,50,000 (Bonus)
For example, let’s say the average monthly salary of the employee over the last 12 months is ₹12,000. If that’s the case, the EDLI amount will be:
EDLI amount = 35 × ₹12,000 + ₹2,50,000
= ₹6,70,000
Therefore, the total EDLI payout in this case would be ₹6,70,000. The maximum payout under the scheme is capped at ₹7,00,000. If the salary is lower, the payout will also be lower, but the bonus remains fixed at ₹2,50,000.
The Employees Deposit Linked Insurance (EDLI) Scheme is a crucial financial safety net for employees and their families. It ensures that in the unfortunate event of an employee’s death, the nominee receives a lump sum payout. This payout helps the family manage financial needs during a difficult time. Since the EDLI Scheme is linked to the EPF, you don’t need separate enrolment. If you’re covered under EPF, you are automatically covered under the EDLI Scheme.
Keeping your nominee details updated in your EPF account is essential for a smooth claims process. Stay informed and make the most of the EDLI benefits to secure your family’s future.
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The EDLI Scheme offers life insurance coverage to employees who are covered under EPF. It offers a lump sum payout to the nominee in case of the employee’s death during the period of service.
Any employee who is a member of the EPF Scheme and earns up to ₹15,000 per month is automatically covered under the EDLI Scheme.
The EDLI benefit is calculated as 35 times the last drawn salary plus a bonus of ₹1,75,000. The maximum payout is ₹7 lakh.
The maximum benefit under the EDLI Scheme is ₹7 lakh, including the insurance amount and the bonus.
Nominees can claim the EDLI benefit by filling out Form 5 IF and submitting it along with the death certificate, bank details, and other necessary documents to the last employer or EPFO.
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