EDLI – Employees' Deposit Linked Insurance Scheme

What is EDLI?

The Employees' Deposit Linked Insurance Scheme is an insurance cover provided by the EPFO in India for members of the Employees' Provident Fund (EPF). The scheme is free for employees. Only employers are required to make a monthly contribution of 0.5% of the employee's wages.

In case of an unfortunate death of the member, the legally nominated heir gets the maximum assured benefit under the scheme, which is ₹7 lakh, and the minimum benefit of ₹2.5 lakh is also guaranteed if the deceased was in continuous employment for 12 months before their death.

Key Features of EDLI

Below are some of the features of the Employees' Deposit Linked Insurance Scheme:

Eligibility Criteria For EDLI

The following persons are eligible to apply for claiming the EDLI benefit in the event of the death of the EPF member while in service:

1. Nominees:

   The person(s) specifically nominated by the member under the EPF Scheme.

2. Family Members (If No Nomination Exists):

   All eligible members of the deceased member's family, as defined under the EPF Scheme.

   Exclusions: The following relatives are not considered eligible family members for this purpose:

   • Major sons (who are not insane or infirm).
   • Married daughters with major sons.
   • Married granddaughters (with major sons).

3. Legal Heir (If No Family and No Nomination Exist):

   The legal heir of the deceased member. A Succession Certificate may be required to prove the claim.

4. Guardian of a Minor:

   The Guardian (natural or legal) of a minor nominee, minor family member, or minor legal heir is eligible to file the claim on their behalf.

Documents Required For the EDLI Scheme

Here is the list of documents that are required for the EDLI Scheme are mentioned below:

• Properly filled Form 5 (IF)
• Deceased employee's death certificate (for insurance claim)
• Succession Certificate, if the legal heir is filing for the claim
• Cancelled cheque copy
• PF details for the last 12 months (under the Certificate part).
• An attested copy of the Member's Nomination Form.
• A Guardianship Certificate is required if someone other than the minor's natural parent/guardian is filing the claim for them.

Key Benefits of the EDLI Scheme

Here are the main advantages of the Employees' Deposit Linked Insurance (EDLI) Scheme, simplified and organized:

1. Guaranteed Free Life Insurance:

   Provides free life insurance cover to the employee's family.

2. Death Benefit:

   The family receives a significant financial payout upon the employee's death while in service.

3. Universal Applicability:

   Covers all employees regardless of their designation or salary, with no exclusions.

4. Global Coverage:

   In the unfortunate event of an employee's demise, the benefit is guaranteed and remains payable internationally.

5. Boosts Morale:

   Secures the employee's family financially, which helps boost employee morale.

Steps to Claim Benefits Under EDLI

The claim process is for the nominee or legal heir to receive the life insurance and other benefits of the deceased employee (who must have been an active EPF contributor at the time of death).

1. Fill the Claim Forms

   The primary claimant is the Nominee registered by the employee. If there is no nominee, the Family Members or Legal Heirs can apply.

   You need to fill out the Composite Claim Form to claim all benefits together, which includes:

   • Form 5 (IF) (for the EDLI Insurance amount).
   • Form 20 (for EPF withdrawal/settlement).
   • Form 10C/10D (for the EPS/Pension amount).

2. Get the Forms Certified

   The form must be signed and certified by the deceased member's last Employer.

   If the employer is unavailable (e.g., the company is closed), the form can be attested by a recognized authority, such as:

   • A Bank Manager (of the branch where the account was maintained).
   • A Gazetted Officer or Magistrate.
   • A Local MP or MLA.

3. Submission and Settlement

   Submit the completed forms and all necessary supporting documents to the Regional EPF Commissioner’s Office.

   Once the claim is accepted, the EPF Commissioner is legally required to settle the payment within 30 days. If the payment is delayed past 30 days, the claimant is entitled to receive 12% annual interest until the date of disbursal.

Wrapping Up

The Employees' Deposit Linked Insurance Scheme is a social security feature that provides a one-time life insurance cover to the nominees of a deceased EPF member. It offers a one-time life insurance payout ranging from a minimum of ₹2.5 lakh to a maximum of ₹7 lakh to the deceased member's nominee or legal heir. This scheme is free for all employees who are EPF members, and claims are designed to be settled quickly, usually within 30 days. Like all pension plans, it serves as an essential financial safety net for employees' families in the event of death while in service.