The Benefits of Group EDLI Scheme
The sum assured under the Group EDLI is higher than coverage provided by the EPFO. This scheme provides financial security to the employee's family by providing a lump sum amount to the claimant. The company undertakes this process if the employee dies because of natural causes, illness, or accident.
EDLI's coverage is different from insurances like workmen compensation or group personal accident. It provides 24/7 protection, not just limited to workplace incidents. The cover is worldwide, and the nominee receives the assured amount regardless of the place and time of the employees' death.
No threshold of minimum years of service to avail EDLI benefit. An EDLI policy can insure all employees, regardless of their designation. Every employee who is a member of the provident fund can avail coverage under the EDLI scheme. Moreover, this scheme is portable between jobs.
Claim settlement is fast with simple processes. The IRDAI regulates turnaround times. You can escalate any delays to us through our mobile app 'Notify' or by contacting our customer service numbers. We ensure completeness of documentation and expedite the claim processing for a faster resolution.
The Group Employee's Deposit Linked Insurance (EDLI) scheme ensures that in the unfortunate event of an employee's untimely demise, their family receives a lump sum amount. This financial support helps cover immediate expenses, sustain their standard of living, and secure their future, alleviating the financial burden during a challenging time.
Under the Group Employee's Deposit Linked Insurance (EDLI) scheme, the premiums paid by the employer are fully exempt from tax as per the Income Tax Act. This exemption reduces the taxable income of the employer, leading to significant savings. For employees, the benefits received under the EDLI scheme are also tax-free.
Quick Guide to EDLI Insurance
EDLI – Employees Deposit Linked Insurance Scheme
EPFO introduced the EDLI scheme in 1976 with the aim of providing insurance benefits to its members. Primary objective of scheme is to offer financial support to the member’s family in event of their sudden demise. Unlike other insurance schemes, there are no exclusions under the EDLI scheme, and all members are eligible for coverage.
We calculate the amount of insurance coverage in the scheme based on the member’s salary in the 12 months before their death. We calculate the coverage based on the monthly basic salary and average PF balance of the preceding 12 months. The computation is 35 times the basic average monthly salary, with a cap at Rs. 15,000.
The EDLI scheme is a crucial financial safety net for the dependents of the members in case of their sudden demise. This is an economical method for employers to provide life insurance coverage to their workers. The EDLI scheme is a significant social security initiative that offers life insurance coverage to EPFO members. It provides financial protection to the families of deceased members and is a beneficial perk for organized sector employees.
How does the Employee’s Deposit Linked Insurance (EDLI) Scheme operate?
Employees’ Deposit Linked Insurance Scheme is a group insurance program offered by Employees’ Provident Fund Organisation (EPFO) in India. All members contributing to the Employees’ Provident Fund (EPF) in organized sector receive life insurance coverage through this scheme.
The EDLI scheme aims to give financial security to the family of a member who dies suddenly. Employers with over 10 employees must engage in the program, and they are responsible for covering the premium costs. The EDLI scheme connects the coverage it offers to the member’s EPF balance.
The scheme calculates the assured amount by multiplying 35 with average monthly basic salary (capped at 15000/month). Additionally, the calculation involves considering the average PF balance of the last 12 months (capped at 1.75 Lakhs). This process precedes the deaths of members for 12 months. The minimum sum assured is Rs.2.5 lakhs, and the maximum is Rs.7 lakhs.
Coverage : EDLI scheme offers life insurance coverage to all EPFO members, including those in organized sector who contribute to EPF.
Mandatory for Employers : Employers with more than 10 employees must participate in scheme, and the employer is responsible for paying the premium.
EPF Balance : The member’s EPF balance is associated with the coverage offered by the EDLI scheme. This means that the sum assured under the scheme increases as the member’s EPF balance grows.
Cost-effective : The EDLI scheme is cost-effective way for employers to provide life insurance coverage to their employees. As the premium paid is relatively low compared to the coverage provided.
Features of EDLI Scheme
The EDLI scheme features include:
- Provides life insurance coverage to all members of EPFO, including those working in the organized sector.
- The calculated sum assured is determined by multiplying 35 with the monthly basic salary. And averaging the EPF account balance for the last 12 months preceding the member’s death.
- The minimum sum assured under the scheme is Rs.2.5 lakhs and the maximum are Rs. 7 lakhs.
- The scheme is mandatory for all employers with more than 10 employees.
- The employer bears the cost of the premium.
- The coverage of the scheme is linked to the EPF balance of the member.
- The scheme provides financial security to the family of the deceased member in case of their untimely demise.
- The EDLI scheme is a cost-effective way for employers to provide life insurance coverage to their employees.