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ELDI Scheme Under PPF Explained

Writer: MyRupayaMyRupaya

The Employees' Deposit Linked Insurance Policy 1976 (EDLI Scheme) is a life insurance scheme for all employees who are members of the government-sponsored Employees' Provident Funds (EPF) Scheme, which was established in 1952. Employers contribute a minimal amount of 0.5 percent of monthly earnings, up to a maximum pay limit of Rs 15,000, to the EDLI Scheme. Employees are not required to contribute anything in order to receive insurance coverage under this scheme. What is the size of the claim, who is eligible for EDLI benefits, and how do they apply?


Employees do not need to sign up for EDLI individually. Any employee who participates in the EPF plan is automatically enrolled in the EDLI scheme. Apart from the provident fund, a portion of employer payments goes to the Employee Pension Scheme (EPS) and another portion to the EDLI.

The EDLI insurance provides a maximum benefit of Rs 7 lakh. The minimum benefit is Rs 2.50 lakh, regardless of earnings.


The scheme's contribution is made by the employer.

The EDLI Scheme provides insurance benefits to qualifying family members of a deceased member who has worked for a continuous period of more than twelve months, regardless of whether the person worked for the same company or transferred jobs during the twelve months prior to his or her death.

A nominee, a family member, or an individual can profit from the EDLI plan.

The EDLI Scheme allows nominees or heirs of a dead member to receive a maximum benefit of Rs 7 lakh. If an individual has worked consistently for 12 months, the minimum insurance payout under the plan is Rs 2.50 lakh, regardless of salary.


The insurance payout is computed using the following formula, as per the latest amendment:


Average monthly salaries for the previous 12 months x 35 + 50% of the average PF balance for the previous 12 months, subject to a ceiling of Rs 1,75,000; where average wages refers to basic pay plus dearness allowance, and monthly wages are capped at Rs 15,000


The minimal benefit, regardless of the calculation, will not be less than Rs 2,50,000.



Who is eligible to get insurance benefits?


The benefits under the programme will be paid to the employee's nominated beneficiary. The nomination process for the EPF programme will also apply to the EDLI scheme. His spouse, unmarried daughters, and minor boys will be beneficiaries if no nomination is made.


The following members of your family are not eligible for the benefit:


Sons who have reached the age of majority

Sons who have reached the age of majority and are the sons of a deceased son

Daughters who are married yet whose husbands are still living

Daughters of a deceased son who are married to living husbands

How can I make a claim for an insurance benefit?


The nominee or beneficiary must complete Form 5 IF in order to obtain the insurance payout in the event of the member's death. The employer's signature should be on the claim form. The commissioner must receive an attested copy of the application form as well as all supporting papers. The Commissioner will sanction the EDLI claim amount after verifying the application form and accompanying papers. The amount of the benefit will be deposited immediately to the beneficiary's account.

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