What is EDLI ?
The Employees’ Deposit Linked Insurance (EDLI) Scheme is an insurance benefit offered by the Employees Provident Fund Organization (EPFO), primarily aimed at providing financial security to private-sector employees who may not enjoy the same level of social benefits as public-sector employees. Introduced in 1976, the scheme ensures a lump sum amount to the nominee in the event of the employee’s death during the service period.
Key Features of the EDLI Scheme:
- Eligibility: Employees with a basic salary of up to INR 15,000 per month are eligible. For those earning above INR 15,000, the maximum benefit is capped at INR 6 Lakhs.
- Bonus: A bonus of INR 1,50,00 is provided as part of the scheme.
- No Employee Contribution: Employees do not contribute directly to the EDLI scheme, only to the Employees’ Provident Fund (EPF).
- Employer’s Contribution: The employer contributes 0.5% of the employee’s basic salary, up to a maximum of INR 75 per employee per month. If no other group insurance scheme is in place, the total contribution is limited to a salary of INR 15,000.
- Mandatory Registration: Organizations with more than 20 employees must register under the EPF Act, automatically making their employees eligible for EDLI.
- Alternate Group Insurance Schemes: Organizations can opt for another group insurance policy provided the benefits are equal to or greater than those of the EDLI scheme
How HR teams use this term
HR teams usually use EDLI when they write policies, explain employee communication, review payroll or leave records, or keep employee data clean in an HRMS.