Employees Deposit Linked Insurance Scheme

EDLI, also stands for Employees Deposit Linked Insurance Scheme, is an insurance cover for private sector employees offered by the Employees' Provident Fund Organisation. Under this scheme, the beneficiary or registered nominee will receive a lump sum if something happens to private sector employees, leading to deaths during the service period. Simply put, the insurer's family will get financial protection in the form of a lump sum amount if the employee dies during the job period.

The EDLI scheme and the Employees Provident Fund are registered under the Miscellaneous Provisions Act 1952. To get the EDLI benefits, private sector employees must subscribe to the plan. The extent of the claim amount and benefit the nominee will receive under the EDLI scheme depends on their last drawn salary.

Some of the key features of the ELDI scheme are listed below:

• All the employees whose basic salary is under ₹15,000 can apply for the scheme. Further, if the basic salary of the private employee exceeds ₹15,000, then the maximum receiving amount limit is ₹7 lakh.

• If the employee contributes to the EPF scheme, there is no need to contribute to the EDLI scheme separately.

• Under the scheme, a beneficiary will get a bonus of up to ₹2,50,000 when making a claim.

• There is no servicing period to avail the benefit of the EDLI scheme.

• There is not a single exclusion under the EDLI scheme. The subscriber of the policy will get protection all the time.

• If the subscriber of the EDLI scheme has decided to go with higher-paying life insurance can easily opt out of the policy anytime.

Mainly, the employer contributes to the scheme, and it has a defined formula: a fixed percentage of dearness allowance(DA) and salary.

• The employee contribution to the EPF or Employee's Provident Fund is 12% of the basic salary and DA. Further, the employer contribution to the EPF is 3.67% of the basic salary and DA.

• The employee contribution is nil under the EPS or Employee's Pension Scheme. Further, the employer contribution is 8.33% of the basic salary and DA.

• In the EDLI scheme, employee contribution is nil, and employers must contribute 0.5% or a maximum of rs 75.

The EDLI calculation formula in death case is mentioned below:

30 x the employee's average monthly salary for the last 12 months up to ₹15000 + Bonus Amount, which is ₹2,50,000 = ₹700000.

Suppose employee ABC has a salary of ₹12,000 per month; then, under the EDLI scheme, the nominee will receive the payout as per the formula is

(30 x ₹12000) + ₹2,50,000 = ₹610000.

There are various benefits for private sector employees to register under the EDLI scheme, some of them are listed below:

• Under the EDLI scheme, the employee's family will get free financial protection in case of their death during the job.

• The EDLI employer contribution is minimal, but the benefits are substantial to employee families.

• Another benefit of the scheme is it applies to all employees irrespective of their designation and salary.

• Further, under the policy coverage, the employee's family or legal heir will get the amount even if the policyholder dies in a foreign nation.

• To avail of the benefits of the EDLI scheme, employees need to fulfil the below-mentioned criteria.

• The basic salary of the employee is up to ₹15000. However, if the employee's basic salary is beyond ₹15000, the maximum benefit is up to ₹7 lakh per the scheme.

• Organisations seeking to enrol in the EDLI scheme must have at least 20 employees.

A procedure with proper documentation needs to be followed to get the EDLI insurance benefits. The documents that are required are listed below:

• Filled out Form 5 IF needed to submit along with other documents.

• The legal heir of the policyholder has to provide the succession certificate if they are applying for the claim.

• A death certificate of the policyholder is a must.

• Aadhar card number and recent photographs of policyholders.

• If the claim amount is filed on behalf of a minor, then the applicant must provide the guardian certificate.

• A cancelled cheque copy must be submitted to receive the claim amount in the mentioned bank account.

To get the EDLI benefit, the beneficiaries of the policy need to file a claim. It can be filed online and offline. To claim the EDLI offline, you must visit the regional EPF Commissioner's office in your area with all the documents. The procedure to file EDLI online are:**

Step 1: Visit the online portal of EPFO.

Step 2: Further, on the portal, click on the "Death claim filing by beneficiary"

Step 3: Next, it will redirect to a page where the nominee needs to fill out the details like Universal Account Number or UAN number, Aadhar number, name, etc.

Step 4: After filling out the details, the nominee must verify the captcha code and check the declaration box.

Step 5: Once done, the nominee must click the "Get Authorisation Pin" button.

Step 6: Further, a pin will be sent to the beneficiary's number linked to the Aadhar card. After entering the PIN, the nominee can file for the EDLI benefits claim.

Step 7: All the documents mentioned above with filled Form 5 IF need to be submitted on the portal. Make sure that all the documents are in PDF format and their size is under 2MB. After uploading them, click the "Submit" button.

Step 8: The employer will verify all the documents, and if everything seems okay, they will forward them to the EPF office.

Step 9: The EPF office will review all the documents and applications. Once the EPF approves the claim, the amount will be disbursed to the nominee's account.

Step 10: Confirmation message will be sent to the nominee after the EDLI benefits claim is disbursed.

There are some essential considerations that nominees or beneficiaries must make before filing the claim.

• The subscriber of the scheme should be an active contributor to the EPF scheme.

• The nominee can file for the EDLI claim. If the member hasn't listed any nominee, the claim can be raised by the surviving family member, including spouse, unmarried daughters, and male children.

• Further, if the subscriber has no surviving family members, their legal heir can make a claim request.

• The filled-out claim form needs to be signed by the company's employer. If there is no employer, then it can be attested by authorities like a magistrate, gazetted officer, bank manager, MP, MLA and more.

• If the nominee needs to make the EPF withdrawal claim for the deceased person, then they need to submit Form 20 along with Form 5 IF.

The EDLI scheme is an excellent scheme from the government offered to private sector employees' family members if a policyholder dies during the service period. Further, the scheme benefits are transferable with respect to jobs.

This insurance coverage certainly boosts the employee's morale, knowing that their family is well protected.

Other than this, having a health insurance policy is also necessary if you want to protect you and your family's financial assets during a medical emergency. You can supplement it with critical illness insurance if certain critical illnesses run in your family.

Tata AIG offers a comprehensive health insurance plan with cashless medi-claim benefits in their 8000+ network hospitals nationwide.

What is the maximum amount of deposit-linked insurance admissible?

The maximum amount for the EDLI scheme is ₹7 lakh.

How can I check my EDLI status?

To check the EDLI claim status, you need to follow these steps:

Step 1: To check the status, go to the EPFO site.

Step 2: You need to click on the "Our services" option.

Step 3: Under that, you need to click on the "Know Your Claim Status" option.

Step 4: After that, you will be redirected to a new window where you have to add your UAN number and captcha. Then, click the "Submit" button to get EDLI status.

Is it mandatory to contribute to EdLI?

Employers with employee provident funds need to contribute to the EDLI scheme.