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Employees Provident Fund Organisation offers EDLI scheme, giving EPF members life insurance up to Rs 7 lakh. Employers contribute 0.5 percent of wages.
EPFO EDLI Scheme Explained: Life Insurance Benefit Up to Rs 7 Lakh for Employees
What is EPFO’s EDLI Scheme? The Employees’ Provident Fund Organisation runs the popular retirement savings scheme, where both employee and employer can contribute to build a financial cushion for employee for his/her silver period. It is a popular one and most of us have a pretty good idea about it.
But not a lot of EPF subscribers have an idea that they are being covered under life insurance scheme called ‘the Employees’ Deposit Linked Insurance (EDLI) scheme, offering a cushion to family in times of mishap.
What Is EDLI Scheme?
EDLI scheme provides life insurance to EPF subscribers. In case of death during service, the nominee of EPF member receives a minimum of Rs 2.5 lakh and up to Rs 7 lakh, based on the employee’s salary and EPF balance.
Employers contribute 0.5% of wages, with no deduction from employees.
Who Is Eligible For EDLI?
EDLI scheme is available for:
- All employees of factories and establishments.
- It is a automatic membership for EPF employees.
- It is not applicable for tea factories in Assam.
What Are Benefits of the Scheme?
It offers life insurance cover to its members, which is up to Rs 7 lakh in case of death during service.
Moreover, there’s an assurance benefit paid to nominee/legal heirs on death. Claims are processed within 20 days, ensuring quick financial support to the family.
Employers are responsible for contributions of both directly employed and contract workers.
Employers must remit contributions within 15 days of the close of every month by bank draft, cheque, cash, or electronic transfer.
What Happens If Employer Default On Contribution?
According to EDLI rules, if an employer defaults on contributions, damages are charged at 1% of arrears per month (or part thereof).
Central Board may reduce or waive damages in cases like change of management, merger, or financial hardship (up to 100% waiver in special cases).
How To Assure Maximum Benefit?
The scale of assurance benefit is dependent on average PF balance of last 12 months (with conditions). Alternatively, 35x average monthly wages (max Rs 15,000) + 50% of average balance, capped at Rs 1.75 lakh.
To calculate benefits, the average balance of last 12 months’ PF contributions (employee + employer + interest) is considered.
Employees must maintain consistent contributions to ensure eligibility for higher assurance benefits
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst…Read More
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst… Read More
October 27, 2025, 08:28 IST
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