Employees' Deposit Linked Insurance Scheme (EDLI)

Key Features of EDLI Scheme

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

Eligibility Criteria For EDLI

To claim benefits under the Employees' Deposit-Linked Insurance (EDLI) Scheme, eligibility criteria apply to both the deceased employee and the beneficiaries filing the claim:

1. Nominees:

   The person named in the formal EPF nomination papers.

2. Family Members

   Spouse, minor sons, sons up to age 25, and unmarried daughters if no nomination was filed.

   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.

5. Deceased Employee Conditions

   • Active Employment: The employee must have been an active EPFO member employed at the time of his demise. 
   • Service Duration: No minimum service length is required to qualify for basic insurance coverage.
   • Payout Range: Payouts range from a minimum of ₹2.5 lakh up to a maximum of ₹7 lakh.
   • 12-Month Rule for Minimum Payout: To guarantee the minimum ₹2.5 lakh payout, the employee must have completed 12 months of continuous service before passing away (breaks up to 60 days are allowed).

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:

Below are the main advantages of the Employees' Deposit Linked Insurance (EDLI) Scheme:

• Zero Cost to Employees: 
  The scheme is completely free for workers. Employees contribute 0%, while the employer funds the premium by contributing 0.5% of monthly wages.
• Guaranteed Payout Range:
  Provides a minimum assurance benefit of ₹2.5 lakh (for continuous service of 12 months) up to a maximum payout of ₹7 lakh.
• Bonus Payout Addition: 
  A fixed bonus of ₹1,75,000 is added to the 35x average-salary calculation which helps max out the financial benefit for eligible families.
• Universal Applicability: 
  Covers all salaried workers in EPF-registered organisations regardless of their designation, salary slab, or job role.
• Direct Bank Transfer: 
  The claim amount is deposited directly into the bank account of the registered nominee, family member, or legal heir, ensuring quick financial support without delays.

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.