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EDLI Scheme (2023): Features, Criteria & Benefits

EDLI Scheme

The Employees Deposit Linked Insurance (EDLI) Scheme, introduced by the Employees Provident Fund Organisation (EPFO) in 1976, serves as a vital financial safeguard for private-sector employees. In a world filled with uncertainties, this scheme seeks to provide a safety net for those who might not enjoy the same level of financial and social security as their counterparts in the public sector. In this article, we delve into the various aspects of the EDLI Scheme, its eligibility criteria, benefits, and claim procedure, shedding light on how it ensures financial well-being for families in times of adversity.

The EDLI Scheme, a part of the Employees’ Provident Funds and Miscellaneous Provisions Act, of 1952, offers invaluable benefits to employees and their beneficiaries in the event of an untimely demise.

Understanding the EDLI Scheme

The primary objective of the EDLI Scheme is to extend the benefits of life insurance to private-sector employees, ensuring that their families do not suffer financial loss in the event of the employee’s untimely death while in service. Under this scheme, if an employee dies during their employment and has been in service for a minimum of 12 months, the beneficiary is entitled to receive an assurance benefit in a lump sum.

Eligibility Criteria

  1. Family Members and Nominated Beneficiaries: The EDLI Scheme allows family members nominated under the EPF Scheme to claim coverage. In the absence of nominated family members, legal successors are eligible to receive the benefits. Furthermore, guardians of minor family members or nominees, as well as legal heirs, can claim the benefits.
  2. Ineligible Beneficiaries: Certain individuals are not eligible for benefits, including sons or daughters who have reached the age of 18, the sons of deceased fathers who are now of majority age, daughters of insured individuals whose husbands have passed away, and daughters of deceased sons.

Key Features of the EDLI Scheme

  1. Salary-Based Coverage: The insurance benefit under the EDLI Scheme is contingent on the employee’s salary, ranging from a minimum of ₹2.5 lakhs to a maximum of ₹7 lakhs. The maximum insurance benefit was raised from ₹6 lakhs to ₹7 lakhs in response to a gazette notice issued on April 28, 2021, due to the Covid-19 pandemic.
  2. Mandatory for Employers: Employers with more than 20 employees are required to sign up for the Employees’ Provident Fund (EPF). Consequently, every employee with an EPF account is eligible to join the EDLI Scheme.
  3. Employer Contributions: Employers are required to contribute 0.5% of the base salary or a minimum of ₹75 per employee per month, as per the EDLI rules. In the absence of a group insurance plan, the maximum contribution is limited to ₹15,000 per month.

Benefits of the EDLI Scheme

  1. Financial Security: Employees covered by the EDLI Scheme ensure that their families receive financial support in case of their unfortunate demise while in service. This lump-sum benefit can go a long way in easing the financial burden on the family.
  2. Tax Benefits: The EDLI Scheme offers tax deductions under the Income Tax Act, providing tax-free returns to the employees and their beneficiaries.
  3. Additional Income Stream: The EDLI Scheme complements employees’ savings by providing them with an interest-earning insurance benefit.
  4. Portability: The EDLI Scheme allows employees to transfer their PF account when switching jobs, ensuring the continuity of their insurance coverage.

Claiming Benefits Under the EDLI Scheme

To claim benefits under the EDLI Scheme, the following documents are typically required:

  • A correctly filled Form 5.
  • The death certificate of the insured individual.
  • A succession certificate, if applicable.
  • Guardianship certificates, if filed on behalf of minors.
  • A copy of a cancelled check for the account where the payment is due.


The Employees Deposit Linked Insurance Scheme stands as a crucial pillar of financial security for private-sector employees and their families. As we navigate an increasingly uncertain world, this scheme ensures that those who might not enjoy the same social security benefits as public-sector workers are safeguarded in times of adversity. Its eligibility criteria, benefits, and ease of claiming make it an invaluable asset for employees and their families. By providing financial protection and peace of mind, the EDLI Scheme truly serves as a beacon of hope for the private-sector workforce.

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