Understanding the Employees' Deposit Linked Insurance (EDLI) Scheme
EDLI is the abbreviation for the Employees' Deposit Linked Insurance Scheme. Here, "deposit" refers to the average deposit in the Employees' Provident Fund (EPF). When an employee dies while in service, the family will receive compensation based on his or 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/-.
Example Calculations
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 Rs. 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 Rs. 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 Rs. 100,000/-).
However, there are better insurance schemes with the same premium, even without considering the deposits. Some organizations are exempt from EDLI and provide better benefits in lieu of it. Some schemes specify more than Rs. 100,000/- for natural death and double benefits for accidental death.
Therefore, the difference mentioned above is that in EDLI, it depends on the deposit; whereas in insurance, it is not linked to the deposit.
Regards,
Abbas.P.S, ITI Ltd, Palakkad 678 623.
Ph. [Phone Number Removed For Privacy Reasons]