EDLI

The Employees’ Deposit Linked Insurance Scheme, or EDLI, is a life insurance program run by the Employees’ Provident Fund Organization (EPFO) for private-sector workers. When it launched in 1976, the idea was straightforward: private-sector employees didn’t have the same financial safety net as their public-sector counterparts, and EDLI was introduced to close that gap.

If an EPFO member dies while still employed, their nominee receives a lump sum payout of up to INR 6 lakhs.

Who is covered

Any organization registered under the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 falls under this scheme. In practice, that means any company with more than 20 employees must register for EPF, and every employee with an EPF account is automatically covered under EDLI. No separate enrollment is needed.

Key details

Employees don’t contribute to EDLI at all. Their only obligation is their regular EPF contribution. The employer covers the EDLI cost, which is capped at 0.5% of basic salary or Rs. 75 per employee per month, whichever is lower. If no separate group insurance exists, the monthly cap rises to Rs. 15,000.

Employees earning a basic salary below INR 15,000 per month are covered at their actual salary. Those earning above that threshold are still covered, but calculations are capped at INR 15,000. Dearness allowance is added to basic salary for all EDLI calculations.

A bonus of INR 1,50,000 is also available under the scheme.

Companies can opt for a separate group insurance plan instead of EDLI, but the benefits must match or exceed what EDLI provides.

How the payout is calculated

The formula is:

(Average monthly salary over the last 12 months, capped at INR 15,000) multiplied by 30, plus the bonus of INR 1,50,000.

That puts the maximum possible payout at INR 6,00,000.