Understanding EDLI: Employees' Deposit Linked Insurance Scheme
EDLI is the abbreviation for Employees' Deposit Linked Insurance Scheme. Here, "deposit" refers to the average deposit in the EPF. When an employee dies while in service, the family will receive compensation based on his/her deposit. To claim, the employer has to pay 0.5% as its premium.
Determination of Deposit
The average deposit of the last twelve months, as well as the total service, will be calculated, and whichever is less will be taken for the calculation.
Determination of Compensation
- Up to Rs. 50,000/-, the actual amount will be received.
- Beyond the first Rs. 50,000/-, 40% of the rest will be received, subject to a ceiling of Rs. 100,000/-.
Examples
- Example a) Deposit Rs. 100,000:
For the first 50,000 - 50,000
Next 50,000 - 20,000
Total - Rs. 70,000 (will receive the full amount as it does not exceed 100,000).
- Example b) Deposit Rs. 200,000:
For the first 50,000 - 50,000
Next 150,000 - 60,000
Total - Rs. 110,000 (will receive Rs. 100,000 only as it exceeds 100,000).
- Example c) Deposit Rs. 300,000:
For the first 50,000 - 50,000
Next 250,000 - 100,000
Total - Rs. 150,000 (will receive Rs. 100,000 only as it exceeds 100,000).
However, there are better insurance schemes with the same premium, even without considering the deposits. With these types of better benefits, some organizations are exempted from EDLI. Instead, they provide alternatives to EDLI. Some schemes specify more than Rs. 100,000/- for natural death and double benefits for accidental death.
Regards,
Abbas. P. S, ITI Ltd, Palakkad 678 623.
Ph. [Phone Number Removed For Privacy Reasons]