The Employees’ Deposit Linked Insurance Scheme is known as the EDLI. For private sector workers who lack the social and financial stability enjoyed by public sector workers, EPFO (Employees Provident Fund Organization) offers insurance coverage. In order to provide life insurance benefits to private sector workers, the government implemented EDLI in 1976.
All organizations registered under the Employees Provident Fund (EPF) and Miscellaneous Provisions Act of 1952 are eligible to participate in the EDLI scheme. In the event that a member passes away during their service, the EPFO nominee receives a lump sum payment of up to INR 6 lakh.
Features of the EDLI Program
- All employees who get a base wage of less than INR 15,000 are eligible for the EDLI Scheme. The maximum benefit is INR 6 lakhs if an employee’s monthly pay exceeds 15,000.
- Under the EDLI Scheme, a bonus of INR 1,50,000 is given.
- Employees are only required to contribute to EPF they are not required to contribute to EDLI.
- Any company with more than 20 workers must register for the Employee Provident Fund (EPF). As a result, any employee with an EPF account is immediately qualified for the EDLI program.
- Another group insurance plan may be selected by an employer, but the benefits must be on par with or greater than those provided by EDLI.
- According to the EDLI’s requirements, an employer’s monthly payment must not exceed Rs. 75 per employee or 0.5% of the employee’s base pay. The highest monthly contribution, in the absence of any other group insurance plan, is Rs. 15,000.
- The dearness allowance must be added to the base pay for all EDLI computations.
- Finding the EDLI Charge
The following formula will be used to determine the payout that will be given:
{Average Employee Monthly Salary for the Past 12 Months (up to a maximum of 15,000/- per month) x 30} Bonus Amount (Rs. 1,50,000/-)
As a result, the EDLI maximum payout is limited to Rs. 6,00,000.
