What Is EDLI? - Insurance
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What Is EDLI? - Insurance

damera_chakrapani Started The Discussion:

Hi, I am vinod from Andhra Pradesh. What is EDLI? Who will eligible for EDLI? How to apply ? How to withdrawa EDLI?

karthik.scorpio22 - Member Since: Jul 2008
Hi...

EDLI - Employees Deposit linked Insurance (India Death payment Scheme)

What is EDLI?
All employees to whom the Employee's Provident Fund and Miscellaneous Provision Act , 1952 applies, have a Statutory liability to subscribe to Employee's Deposit Linked Insurance Scheme, 1976 to provide for the benefit of Life insurance to all their employees. Under the scheme as amended with effect from 24th June,2000 the insurance benefit is equal to the average balance to the credit of the deceased employee in the Provident Fund during the last 12 months, provided that where such balance exceeds Rs.35,000, insurance cover would be equal to Rs.35,000 plus 25% of the amount in excess of Rs.35,000 subject to a maximum of Rs.60,000. Thus if the lenth of service is not adequate and/ or the salary is low the average balance may be substantially less and such the benefit to the employee's family is either inadequate or non-existent.

The contribution @ 0.50% of each employee's salary is payable by the Employer to the Provident Fund Authorities.


THE BETTER ALTERNATIVE:

However, under Sec. 17(2A) of the act, the employer may be exempted from contributing to this scheme, if he/she has provided for better insurance benefits through alternative scheme. LIC's Group Insurance Scheme in lieu of EDLI has been accepted as one such better alternative.


ADVANTAGES TO THE EMPLOYER :
  1. The premium payable by the employer is usually less than the total contribution being paid by the employer to R.P.F.C; particularly when the salary level is high and average age of the group is low.
  2. Settlement of claim is quicker, LIC requires only the death certificate and the Claim Form from the employer.
  3. Premium paid by the employer is treated as normal business expenses for Income-Tax purpose.
ADVANTAGES TO THE EMPLOYEE:
Each employee is covered for a sum assured ranging between 5,000 to 2,00,000 depending upon the current salary and service put in from day one irrespective of the actual balance in the Provident Fund. Alternatively every employee/ worker can be covered for a uniform sum assured which will be decided depending upon the group size.


ACCIDENT BENEFIT:
Double accident benefit can be allowed to the extent of the Sum Assured for an extra Premium.


STEPS TO INTRODUCE THE SCHEME:
  1. Put up notice for the knowledge of the employees that you are going in for LIC's Scheme in lieu of EDLI.
  2. Apply to the Regional Provident Fund Commissioner under Sec.17 (2A) of the E.P.F. and M.P. Act 1952 to exempt you from EDLI Scheme. The application should be accompanied by the prescribed requirements including the Rules of the Proposed Group Insurance scheme. Central PF Commissioner, has authorized the R.P.F.C. to grant exemption from the 1st of the month in which the application for relaxation is submitted. LIC also offers necessary guidance to the employers for seeking relaxation.

Regards,

Karthik J

KamalaPrasad - Member Since: Jun 2009
Hi Karthik, Thank a lot for the information.

Can you also help to give the contents of the notice for the knowledge of the employees when we are going in for LIC's Scheme in lieu of EDLI.

Kamala

abbasiti - Member Since: May 2010
EDLI is the abbreviation of Employees' Deposit Linked Insurance Scheme. Here deposit means average deposit in EPF. When an employee dies while in service, family will get some compensation based on his/her deposit. To get the claim, the employer has to pay 0.5% as its premium.

1. Determination of Deposit.

Average of deposit of last twelve months as well as total service, will be calculated and whichever is less being taken for the calculation.

2. Determination of Compensation.

Upto Rs. 50,000/- he will get actual. Beyond first 50,000/- he will get 40% of the rest; subject to ceiling of Rs. 100,000/-.

Eg. a) Deposit Rs. 100,000

For 1st 50000 - 50000, Next 50000 - 20000
Total - Rs. 70,000 (will get full amount as it is not more than 100,000).

Eg. b) Deposit Rs. 200,000

For 1st 50000 - 50000, Next 150,000 - 60000
Total - Rs. 110000 (will get Rs.100,000 only as it ecxeeds 100,000).

Eg. c) Deposit Rs. 300,000

For 1st 50000 - 50000, Next 250,000 - 100,000
Total - Rs. 150,000 (will get Rs. 100,000 only as it exeeds 100,000/-)

But there is better Insurance schemes with the same premium, even without cosidering the deposits. With this type of better benefits, some of the organisations are exempted from EDLI. Instead they are providing in lieu of EDLI. There are schemes which specifies more than 100,000/- for natuaral death and double benefits for accidental death.

Abbas.P.S, ITI Ltd, Palakkad 678 623.
Ph. +91 9447 467 667

subhabratadg - Member Since: Feb 2008
Is there any ceiling of salary for EDLI? Is it that EDLI will be deposited @ 0.5% on any salary e.g 6000/-, 7000/- or 15000/- etc? Thank you for the valuable contribution. Regards Subhabrata Dasgupta

pavan_1225 - Member Since: Nov 2010
Thanks for your valuable info bro.... and also thanks to the one who has posted this important Question

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