Employees Deposit Linked Insurance Scheme (EDLI): Benefits, Eligibility & Charges

The full form of EDLI is Employees’ Deposit Linked Insurance Scheme and it is an insurance cover provided by the Employees’ Provident Fund Organization (EPFO). A nominee or legal heir of an active member of EPFO gets a lump sum payment of up to Rs. 7 lakh in case of death of the member during the service period. All organizations covered under Employees’ Provident Fund (EPF) and Miscellaneous Provisions Act, 1952 get enrolled for EDLI automatically. This EDLI scheme works in combination with EPF and EPS.

EDLI Scheme

The EDLI scheme was launched in 1976 to provide insurance benefits to members of EPFO. The main objective of EPFO behind this scheme was to ensure that the family of members get financial assistance in case of death of the member. There is no exclusion under this insurance scheme. The insurance cover depends on the salary drawn in the last 12 months of the employment before death.

EDLI Contribution

The employee, as well as the employer, contribute to all three schemes run by the EPFO. The contribution made for each scheme is as follows:

Salient Features of EDLI

• The insurance benefits can be availed by the family members, legal heirs or nominees of the member.
• EPFO members are automatically enrolled for EDLI.
• An EPFO member is only covered by the EDLI scheme as long as he/she is an active member of the EPF. His family/heirs/nominees cannot claim it after he leaves service with an EPF registered company.
• There is no minimum service period for availing EDLI scheme benefits
• The employer has to make the EDLI contribution and no fee can be deducted from the employee’s salary
• The claim amount under ELDI is 35 times the average monthly salary in the past 12 months subject to a maximum of 7 lakh.
• Minimum assurance benefit of Rs. 2.5 lakh, if the deceased member was in continuous employment for 12 months before his death. Moreover, the benefits are directly credited to the bank account of legal heir/nominee.
• The average monthly salary is calculated as the Basic + Dearness Allowance of the employee
• A bonus of Rs. 1.75 lakh is also applicable under this scheme
• The employer can opt out of the scheme in case he takes a higher-paying life insurance scheme for employees under Section 17 (2A)

EDLI Calculation

The insurance amount that the heirs of a deceased member get is calculated as 35 times the average monthly salary in the last 12 months of employment.

The maximum average monthly salary of an employee is capped at Rs. 15,000

So, 35 times the salary comes to be around to be 35 x Rs. 15,000 = Rs. 5,25,000

A bonus amount of up to Rs. 1,75,000 is also paid to the claimant under this scheme

Thus, the total amount payable under this scheme to the beneficiary is Rs. 7,00,000

EDLI Form 5 IF

EDLI Form 5 IF is filled by the nominees, heirs or family members of the member after his death to claim the insurance amount under EDLI Scheme. The EDLI claim form has to be filled separately by each claimant. In case of a minor claimant, the guardian has to fill the form on his behalf. In case of more than one minor where the guardian is the same, a single form has to be filled by the guardian.

The form has to be filled offline and the employer has to furnish the certificate mentioning the date of death of the member. The mode of fund transfer has to be mentioned as well.

The EDLI claim form has to be submitted to the regional EPF Commissioner’s office along with the required document proofs. The claim has to be settled in 30 days and if the EPF commissioner is not able to settle the claim within 30 days, he will be liable to pay an interest of 12% per annum from the deadline date to the date of actual disbursal.

How to Claim EDLI Benefits

• Form 5 IF has to be filled to get the insurance benefits after the death of the member
• The member should have been (at the time of his death), an active contributor to the EPF scheme
• The benefits can be claimed by the nominee of the member
• In case no nominee is declared, the surviving family members will be eligible for claiming the benefits. Family under EPS is defined as spouse, male children (up to 25 years), unmarried daughters.
• If there are no surviving family members, the insurance benefits can be claimed by the legal heir of the deceased member
• The claim form has to be signed and certified by the employer
• In case there is no employer, the form has to be attested by any one of the following:
  • Gazetted Officer
  • Magistrate
  • President of Village Panchayat
  • Chairman / Secretary / Member of Municipal or District Local Board
  • Postmaster or Sub Postmaster
  • MP or MLA
  • Member of CBT or Regional Committee of EPF
  • Bank Manager (of the bank in which the account was maintained)
• Form 5 IF can be filled along with Form 20 (EPF withdrawal claim in case of the deceased member) and Form 10C/Form10D to claim benefits of all three schemes (EPF, EPS and EDLI) in one go.

Eligibility Criteria for EDLI

Following persons are eligible to apply for claiming insurance benefits under the EDLI Scheme:

• Members of the family (Nominees) nominated under EPF Scheme.
• In case of no nomination, all members of the family (except major sons, married daughters with major sons, and married grand-daughters).
• In case of no family, and no nomination, legal heir.
• Guardian of a minor nominee/family member/legal heir

Documents Required for EDLI

The claimant has to submit the following documents along with the Form 5 IF to get the amount disbursed under the EDLI scheme:

• Death Certificate of the member
• Guardianship certificate if the claim is filed on behalf of a minor family member/nominee/legal heir by a person other than the natural guardian.
• Succession certificate in case of a claim by the legal heir.
• Copy of a cancelled cheque of the bank account in which payment is opted.
• In case the member was last employed under an establishment exempted under the EPF Scheme 1952, the employer of such establishment should furnish the PF details of last 12 months under the Certificate part and also send an attested copy of the Member’s Nomination Form

FAQs

Q. Who can benefit from EDLI scheme?

EDLI scheme benefits can be availed by family members, legal heirs or nominees of the deceased.

Q. What is the maximum bonus applicable under the EDLI scheme?

The maximum bonus applicable under the EDLI scheme is Rs. 1.75 lakh.

Q. Can EDLI Form 5 IF be filed online?

No, EDLI Form 5 IF at present has to be filed online.