Employee Deposit Linked Insurance (EDLI)

Provides life insurance cover to private-sector employees, offering a lump sum to beneficiaries upon the employee's death

Financial Security for Your Employees' Families
Employee Deposit Linked Insurance (EDLI) is an insurance cover provided by the Employees' Provident Fund Organization (EPFO) for private sector salaried employees. It offers a lump sum payment to the beneficiaries of an insured employee in the event of the employee's death during the period of service. EDLI applies to all organizations registered under the Employees' Provident Fund and Miscellaneous Provisions Act, 1952.
Lesser Premium Payable
Quicker Claim Settlements
Income Tax Benefits
Key Features of Employee Deposit Linked Insurance
Minimum 20 employees required for corporate coverage
Coverage up to 30 times monthly salary (Basic + DA)
Maximum benefit of INR 7 lakh under EPFO scheme
No waiting period - immediate coverage upon joining EPF
Tax exemption under Section 10(10D) for claim amount
No medical examination required for standard coverage
Why should a Corporate take EDLI insurance from a life insurance company if it is already provided by EPFO?
Under Sec.17(2A) of the Act, employers may be exempted from contributing to the EPFO scheme if they provide better insurance benefits through an alternative scheme

Lesser Premium Payable

Generally lower premiums compared to the EPFO scheme.

Quicker Claim Settlements

Faster processing and disbursement of claims.

Income Tax Benefits

Additional tax advantages for the employer.

Higher Sum Assured

Possibility of obtaining a higher sum assured compared to the EPFO scheme.

EPFO EDLI vs Private EDLI Comparison
Key differences between EPFO scheme and private insurance company EDLI
FeatureEPFO EDLIPrivate EDLI
Maximum CoverageINR 7 lakhHigher sum assured possible
Premium Cost0.50% of basic salary (max Rs. 75)Generally lower premiums
Claim SettlementStandard EPFO processFaster claim processing
Tax BenefitsStandard tax exemptionsAdditional tax advantages
FlexibilityFixed scheme benefitsCustomizable coverage options
What is covered under Employee Deposit Linked Insurance?

Death Benefit

A lump sum amount paid to the beneficiaries in the event of the death of the employee while in service.

Coverage Amount

The sum assured under EDLI is 30 times the average monthly salary (basic + DA) of the preceding 12 months, subject to a maximum limit of INR 7 lakh.

What are exclusions under Employee Deposit Linked Insurance?
No specific exclusions under EDLI scheme
Covers death due to natural causes
Covers accidental death
Covers death due to illness
Does not cover employees not part of EPF

Note: There are no specific exclusions under the EDLI scheme. It provides coverage for death due to any cause, be it natural, accidental, or illness. However, the scheme does not cover employees who are not part of the EPF.

Who can buy Employee Deposit Linked Insurance?
Organizations with 20+ employees registered under EPF Act
Employees with basic salary up to Rs. 15,000 per month
All EPF members are automatically covered under EDLI
Applicable to all private sector establishments under EPF
Manufacturing units and service organizations
Corporate offices and business establishments
Why companies should take Employee Deposit Linked Insurance for their employees?

Mandatory Compliance

It is a statutory requirement for all organizations covered under the EPF Act.

Financial Security

Provides financial assistance to the family of the deceased employee, ensuring their well-being.

Employer's Responsibility

Demonstrates the employer's commitment to the welfare of their employees.

Employee Morale

Enhances employee morale and loyalty by providing security to their families.

Key suggestions to make the best Employee Deposit Linked Insurance plan
Assess if private EDLI offers better benefits than EPFO scheme
Compare premium costs and coverage amounts across insurers
Ensure compliance with EPF Act requirements and exemption procedures
Communicate benefits clearly to employees and their families
Review policy annually to ensure adequate coverage for all employees
Consider additional riders for enhanced protection
Key Benefits of Employee Deposit Linked Insurance

Lesser Premium Payable

Cost-effective insurance solution with lower premium rates compared to individual policies.

Quicker Claim Settlements

Streamlined claim process ensuring faster disbursement to beneficiaries.

Income Tax Benefits

Tax advantages for employers and tax-free claim benefits for employees' families.
FAQs over Employee Deposit Linked Insurance
Common queries about Employee Deposit Linked Insurance

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