What is EDLI?

Meaning & Definition


The Employee’s Deposit Linked Insurance (EDLI) scheme is a social security and insurance program provided by the Employees’ Provident Fund Organization (EPFO) in India. It is designed to provide financial protection and support to the families of employees who are members of the Employees’ Provident Fund (EPF) in the event of the employee’s untimely death.

Key features of the EDLI scheme

  • Insurance Coverage

Under the EDLI scheme, eligible employees who are members of the EPF are provided with a life insurance cover. The insurance coverage is offered in addition to the EPF savings and is separate from the EPF balance.

  • Coverage Amount

The insurance amount provided under the EDLI scheme is based on a multiple of the average monthly wage of the employee during the 12 months preceding their death. As of my last knowledge update in September 2021, the insurance coverage amount is up to 20 times the average monthly wage, subject to a maximum limit. The specific coverage amount and maximum limit may be subject to periodic changes based on government regulations.

  • Eligibility

All employees who are members of the EPF and whose employers contribute to the EPF are covered under the EDLI scheme. Both private and public sector employees are eligible.

  • Nomination

Employees are encouraged to nominate one or more family members who would receive the insurance benefit in the event of their death. This nomination can be made by the employee and can be updated as needed.

  • Claim Process

In the unfortunate event of an employee’s death, the nominee or legal heir can file a claim with the EPFO to receive the insurance amount. The claim process involves submitting the necessary documents and forms to the EPFO.

  • Funding

The EDLI scheme is funded through contributions made by employers, who are required to contribute a certain percentage of the basic wages, dearness allowance, and retaining allowance, subject to a maximum limit, toward the scheme. Employees do not make direct contributions to the EDLI scheme; rather, it is funded by their employers.

  • Beneficiaries

The insurance amount is paid to the nominee or legal heir of the deceased employee, providing financial support to the family during a difficult time.

The EDLI scheme is an important component of India’s social security framework, ensuring that the families of EPF members are financially protected in the event of an employee’s unfortunate demise. It helps provide some measure of financial stability and support to the survivors of the deceased employee. It’s important for employees to keep their nomination details updated to ensure a smooth claim process for their beneficiaries. Please note that the details and coverage limits of the EDLI scheme may have changed since my last update in September 2021, so it’s advisable to refer to the latest government and EPFO guidelines for the most current information.

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