What every employee should know about Employees Deposit Linked Insurance?

Employee Deposit Linked Insurance can support your family with monetary aid in your absence. Here’s what you need to know more about this insurance scheme

What every employee should know about Employees Deposit Linked Insurance?

Do you work in the organised sector? If you do, the chances are high that you receive a series of welfare benefits from your employer. These may include an accident cover, gratuity, provident fund, and a pension scheme. As you work hard for your company, your employer ensures you have a safe and secure retirement ahead. 

But did you know your employer can also support your family with monetary aid in your absence? Through the Employees Deposit Linked Insurance Scheme (EDLI), a lump sum payment will be given to the employee’s nominated beneficiary in the event of his/her demise. 

Let us find out how this scheme can benefit you and your family.

What is EDLI? 

The Central Government launched the Employees Deposit Linked Insurance scheme in 1976. It is linked to the Employee Pension Scheme (EPS), and your family and nominees can claim it on your demise. Under this, a lump sum payment called assurance benefit will be payable to your nominated beneficiary. Essentially, EDLI is similar to a group life insurance cover.


Since the EDLI scheme is linked to EPS and the Employee Provident Fund (EPF) scheme, if you are subscribed to EPF you are automatically enrolled in the EDLI scheme. A unique feature of EDLI is that if and when you change jobs, the scheme does not terminate. The contribution is transferred to the new employer.

Related: Group Insurance Schemes: How does it benefit employees and employers?


Unlike the Public Provident Fund (PPF) scheme, you are not required to contribute towards EDLI. The government and your employer jointly make the contribution. An employer lends 8.33% towards the employee's pension scheme and 3.67% to the EPF, while the employee contributes 12% of his or her basic pay towards the EPF.  Your employer’s contribution will be dependent on your basic wage and dearness allowance. The cash equivalent of your food compensation and retaining allowances may also be added.

Claim calculation 

Calculating EDLI is simple. Your last basic drawn salary is clubbed with the bonus fund available in your EPF account. The claim amount is calculated by adding your last drawn salary multiplied 30 times. Along with it, 50% of the fund available in your EPF is added to this to arrive at the final claim value. This bonus can go up to a maximum amount of Rs. 1.5 lakh. 

The amount that is drawn from your salary has a cap limit of Rs. 15,000. Similarly, the total benefit amount you are eligible for cannot exceed Rs. 6,00,000 under the EDLI scheme. 

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The EDLI scheme ensures your family is provided for in your absence by means of a secure monthly income. As with other welfare schemes, it offers various benefits: 

  1. You are automatically eligible to receive EDLI benefits if you are receiving EPS benefits. No separate formalities are required.
  2. As an employee within the organised sector, you are eligible for EDLI irrespective of whether you are working or retired.
  3. It comes with no exclusions, is available globally, and is not dependent on age or any other individual factor. 

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Loyalty Bonus

In addition to the benefits, the EPFO also offers a further impetus of Rs. 50,000 to its long-standing members. Known as a loyalty-cum-life programme, the additional benefit is given to all members, who have contributed towards the scheme for 20 years and more. This amount is provided at the time of the employee’s retirement.

Moreover, in the event an employee is permanently disabled, the 20-years clause will be not be a deterrent. Hence, based on the proposal, the bonus will be given to the employee even if he or she has contributed to the EDLI scheme for less than 20 years, but has experienced permanent disability.

Here is a list of the bonus benefits to long-time subscribers.

  • Subscribed employees who receive basic pay up to Rs. 5,000 are eligible for a loyalty-cum-life benefit of Rs 30,000
  • Those employees with salaries between Rs. 5,001 and Rs. 10,000 will receive a benefit of Rs. 40,000
  • Members receiving wages more than Rs. 10,000 can get Rs. 50,000 as the loyalty-cum-life benefit

Claims Process - EDLI 

In the event of the employee’s demise, the beneficiary can claim the insured amount. In the absence of a nominee, the legitimate heir can claim the amount. For the legal heir or beneficiary to initiate the claim process, Form 5 along with the EPF withdrawal form must be submitted.

Claiming EDLI

The following can claim the insured amount under EDLI: 

  • Family members (nominees) nominated under the EPF plan
  • In the absence of nomination, all immediate family members
  • In case no immediate family members are available, and in the absence of a nomination, the legal heir can lay claim
  • The guardian of a minor nominee/family member/ legitimate heir

Claim Guidelines 

  • EDLI claim is permissible only if the departed employee was actively working at the time of death
  • The EDLI claim form must be presented along with Form 20 and Form 10D/10C (to claim PF dues as well as Pension/Withdrawal Benefits) 
  • Each form must be filled separately and must be written in block letters, with no evidence of overwriting

Enclosed documents

  • Death certificate of the employee
  • In case the legal heir makes a claim, a succession certificate to be produced
  • Copy of a cancelled/blank cheque of the bank account for payment 
  • PF details of the last 12 months and an attested copy of the deceased employee's nomination form
  • Application form attested by the employer


Insurance is a tool that safeguards you and your family in case of uncertainties. It also helps you save tax through various deductions and exemptions. Working in the organised sector, you would be aware of welfare schemes such as EPF and EPS as you directly contribute to these. 

On the other hand, it’s easy to overlook the benefits of EDLI. If unsure, ask your employer about it. To ensure a smooth claim process, you may want to inform your family about the insurance cover. For easy dealings during claims settlement, you would want to make them aware how the claim process works and the steps involved – after all, who can tell what the future holds? 


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